Tata Coffee will be able to gain a significant presence in the US retail market via Eight O’Clock acquisition and finding its way into the world’s largest coffee market ($21 billion).
India’s Tata Coffee Ltd. had agreed to buy U.S.-based Eight O’Clock Coffee Company for $220 million from private equity firm Gryphon Investors.
Tata Coffee shares surged and hit its daily limit of 20%, ending at 325.65 rupees in a slightly higher Mumbai market during a special trading session on Sunday. The deal will be financed through a combination of equity and non-recourse debt, the Indian plantation and coffee maker said in a statement.
New Jersey-based Eight O’Clock Coffee, is a leading player with a 54% market share in the branded whole bean coffee market in the United States, with sales
of $109 in calendar year 2005.This is Tata Coffee’s 2nd major acquisition in the U.S., giving it further market share in the $21 billion coffee market. It acquired Good Earth, another U.S brand in October 2005. Other foreign companies in Tata Coffee’s kitty include UK brand Tetley and Czech Republic’s JEMCA.
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