Starbucks planned acquisition vaults company into a leadership position
of world’s second-largest beverage category, a $40 billion global market
opportunity ripe for innovation
SEATTLE & ATLANTA--(BUSINESS WIRE)--Nov. 14, 2012--
Furthering its commitment to innovate and transform the tea industry and
enhance the consumer tea experience in the U.S. and internationally,
Starbucks Coffee Company (NASDAQ:SBUX) has agreed to acquire Teavana
Holdings, Inc. (NYSE: TEA) in an all-cash acquisition.
Teavana is a specialty retailer offering more than 100 varieties of premium loose-leaf teas, authentic artisanal teawares and other tea-related merchandise. (Photo: Business Wire)
Together, Starbucks and Teavana will jumpstart the next wave of growth
in this dynamic category, leveraging Starbucks core competencies of real
estate, design and store operations and integrating these with Teavana’s
world-class tea authority, global sourcing capabilities, merchandising
and best-in-class retail store unit economics. Powered by Starbucks
existing infrastructure, Starbucks plans to continue to grow and extend
Teavana’s already-successful 300 mall-based stores as well as add a
high-profile neighborhood store concept that will accelerate Teavana’s
domestic and global footprint.
“We believe the tea category is ripe for reinvention and rapid growth.
The Teavana acquisition now positions us to disrupt and lead, just as we
did with espresso starting three decades ago,” said Howard Schultz,
Starbucks chairman, president and ceo. “Teavana’s world-class tea
authority, coupled with the romance and theater of the retail experience
that is the heart and soul of Starbucks heritage, will create a
differentiated customer experience and business opportunity that
delivers immediate value to shareholders. This complements our existing
Tazo brand and gives us the unique opportunity to create a two-tiered
market position.”
“By contributing deep tea expertise, global sourcing capabilities and a
passion for the category that is second to none in our industry, we
believe we can deliver an elevated tea experience together with
Starbucks,” said Andrew Mack, ceo and co-founder of Teavana, who has
committed to staying and leading Teavana’s day-to-day operations. “After
growing Teavana for fifteen years, we are thrilled that Starbucks will
be able to truly fulfill our mission of bringing premium tea to millions
of people on a global platform. It is with great respect for what Howard
and his team have built that we join the Starbucks family.”
Just as Starbucks pioneered a new retail experience for coffee and
espresso, the company’s acquisition of Teavana provides the opportunity
to do the same within the rapidly growing $40 billion global tea
category. In calendar 2013, Starbucks will integrate its unique assets –
including its leading position in social and digital media, its ten
million member global loyalty program, card and mobile payment platforms
– with the Teavana customer experience to expand Teavana’s current
mall-based store footprint with a comprehensive design strategy that
will include new Teavana neighborhood locations in markets across North
America and around the world. Teavana recently opened its first store in
the Middle East in partnership with Starbucks existing joint venture
partner Alshaya, and has plans to enter new, high-consumption tea
markets around the world in the years ahead.
Starbucks investment in Teavana is matched by its commitment to continue
to grow the Tazo business – giving Starbucks a two-tiered market
position for tea. Starbucks plan is to define a new elevated platform of
tea experience and education, and for both the Teavana and Tazo brands
to grow and complement one another while at the same time elevating the
entire category through a combination of expertise and assets.
“The acquisition of Teavana supports our growth strategy to innovate
with new products, enter new categories, and expand into new channels of
distribution,” said Jeff Hansberry, president, Channel Development and
Emerging Brands for Starbucks, who will assume leadership of the new
subsidiary. “Evolution Fresh, La Boulange and now Teavana demonstrate
how Starbucks will add brands that strengthen our core offering and
create a rich ecosystem of experiences with shared values, mutual
efficiencies and complementary characteristics, thus forming tangible
examples of the success of the Starbucks Blueprint for Growth and a
differentiated health and wellness offering in the marketplace.”
Starbucks has entered into a merger agreement with Teavana to acquire
Teavana for an aggregate acquisition price of approximately $620 million
in cash and expects the acquisition to be accretive to earnings by
approximately $0.01 per share in fiscal year 2013, based off of the
previously announced earnings targets. Teavana stockholders of record
will receive $15.50 per share in cash in the merger which will result in
Teavana becoming a wholly-owned subsidiary of Starbucks. Stockholders of
Teavana holding approximately 70% of the outstanding shares of common
stock have approved the merger agreement by written consent, and the
closing is expected to occur by year end, following receipt of
regulatory clearances.
Webcast Information
Starbucks chairman, president and ceo Howard Schultz and Starbucks chief
financial officer and chief administrative officer Troy Alstead will
host a webcast today at 1:30 p.m. PST to discuss this exciting strategic
acquisition and its significance to Starbucks growing health and
wellness business. The webcast may be accessed on the Investor Relations
page of our website at http://investor.starbucks.com.
A simultaneous webcast will be available and subsequently archived at
Starbucks Newsroom at http://news.starbucks.com.
About Starbucks Corporation
Since 1971, Starbucks Coffee Company has been committed to ethically
sourcing and roasting the highest-quality arabica coffee in the
world. Today, with stores around the globe, the company is the premier
roaster and retailer of specialty coffee in the world. Through our
unwavering commitment to excellence and our guiding principles, we bring
the unique Starbucks Experience to life for every customer
through every cup. To share in the experience, please visit us in our
stores or online at www.starbucks.com.
About Teavana
Teavana is a specialty retailer offering more than 100 varieties of
premium loose-leaf teas, authentic artisanal teawares and other
tea-related merchandise through 300 company-owned stores and on its
website. Founded in 1997, the company offers new tea enthusiasts and tea
connoisseurs alike its "Heaven of Tea" retail experience where
passionate and knowledgeable "Teaologists" engage and educate them about
the ritual and enjoyment of tea. The company's mission is to establish
Teavana as the most recognized and respected brand in the tea industry
by expanding the culture of tea across the world. To support the tea
culture globally, Teavana donates approximately 1% of annual net profits
to the Cooperative for Assistance and Relief Everywhere, Inc., or
"CARE," through its Teavana Equatrade program. For more information,
visit http://www.teavana.com.
Additional Information and Where to Find It
In connection with the proposed acquisition, Teavana intends to file
relevant materials with the SEC, including Teavana’s information
statement in preliminary and definitive form. Teavana stockholders are
strongly advised to read all relevant documents filed with the SEC,
including Teavana’s information statement, because they will contain
important information about the proposed transaction. These documents
will be available at no charge on the SEC’s website at www.sec.gov.
In addition, documents will also be available for free from Teavana by
contacting Teavana’s Investor Relations at investorrelations@teavana.com.
Forward-Looking Statements
Certain statements contained herein are “forward-looking statements”
within the meaning of the applicable securities laws and regulations.
Generally, these statements can be identified by the use of words such
as “anticipate,” “believe,” “could,” “estimate,” “expect,” “feel,”
“forecast,” “intend,” “may,” “plan,” “potential,” “project,” “should,”
“will,” “would,” and similar expressions intended to identify
forward-looking statements, although not all forward-looking statements
contain these identifying words. These statements are based on
information available to Starbucks as of the date hereof, and Starbucks
actual results or performance could differ materially from those stated
or implied, due to risks and uncertainties associated with its business.
These risks and uncertainties include: evolving understanding of the
definition of and consumer preference for super-premium tea; continued
growth in the health and wellness sector and market acceptance of
Starbucks in that sector; the ability of Starbucks to accelerate its
growth in the health and wellness sector and in the tea category; the
potential introduction of super-premium tea by new market entrants; the
ability of Starbucks to successfully integrate Teavana; the long-term
success of Starbucks strategy to innovate with new products, enter new
categories and expand into new channels of distribution; the requirement
to satisfy closing conditions to the merger as set forth in the merger
agreement, including expiration of the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976; the outcome of any
legal proceedings that may be instituted against Teavana and others
related to the transaction; the ability to retain certain key employees
of Teavana; and the risk factors disclosed in Starbucks most recent
Annual Report on Form 10-K, which Starbucks filed with the Securities
and Exchange Commission on November 18, 2011 and the risk factors
disclosed in Teavana’s most recent Annual Report on form 10-K, which
Teavana filed with the Securities and Exchange Commission on April 13,
2012 and in all filings with the SEC made by Teavana subsequent to the
filing of the form 10-K. Forward-looking statements reflect management’s
analysis as of the date of this release. Starbucks and Teavana do not
undertake to revise these statements to reflect subsequent developments,
except as required under the federal securities laws.
Photos/Multimedia Gallery Available: http://www.businesswire.com/multimedia/home/20121114006879/en/
Source: Starbucks Coffee Company
Media:
Starbucks
Lisa Passé, +1-206-318-7100
press@starbucks.com
or
Teavana
Alecia
Pulman, +1-203-682-8224
marketing@teavana.com
or
Investor
Relations:
Starbucks
JoAnn DeGrande, +1-206-318-7118
investorrelations@starbucks.com
or
ICR,
Inc. for Teavana
Farah Soi/Joseph Teklits, +1-203-682-8212
investorrelations@teavana.com