Tata Coffee sips Eight O' Clock Coffee
Our Corporate Bureau
26 June 2006
The acquisition will be funded through a combination of equity and debt. Tata Coffee is 50.67 per cent owned by Tata Tea.
EOC is the third-largest US retail coffee brand in volume terms and boasts of more than 100 years of brand history. It is a leader in the value gourmet segment and a leading player in the branded whole bean segment.
EOC had reported and EBITDA of $27 million on total revenues of $109 million for the year 2005. The company is headquartered in New Jersey and has its roasting and packaging facilities in Maryland.
Tata Coffee said the acquisition would help the company emerge as a significant player in the global coffee industry with strong brands. The US coffee market is worth $21 billion in annual sales and the company will be able to push up exports of soluble coffee. Tata Coffee is also setting up a facility to produce freeze dried coffee targeted at export markets.
The company had recently formed a JV with Beeyu Overseas to market instant coffee in international markets. Tata Coffee holds a majority stake in the JV named Alliance Coffee.
Parent company Tata Tea emerged as one of the largest global players in the tea industry following the acquisition of UK group Tetley. The acquisition of EOC would further reinforce the position of Tata Tea - Tata Coffee combine as one of the major global players in hot beverages.