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Issue Date: Vol. 50, No. 10, October 2010, Posted On: 9/17/2010

Green Mountain To Buy Van Houtte For $890M

Emily Jed
Green Mountain Coffee Roasters Inc., Van Houtte, LJVH Holdings, Keurig, office coffee service, OCS, coffee business, food service, vending business, vending, single-cup coffee brewer, K-Cup, Brûlerie St. Denis, Les Cafés Orient Express Coffee, Brûlerie Mont Royal, Gerard Geoffrion, Filterfresh, Lawrence Blanford

WATERBURY, VT -- Green Mountain Coffee Roasters Inc. announced that it will buy LJVH Holdings, parent company of Canadian coffee roaster Van Houtte, for $890 million. The deal was announced Sept. 14 in Green Mountain's filing with the Securities and Exchange Commission.

Green Mountain president and chief executive Lawrence Blanford said the acquisition will help drive penetration of the Keurig brewer in the Canadian market. He added that Van Houtte's well-known brands and roasting, manufacturing and distribution capabilities will likewise help strengthen the Vermont roaster's foothold in Canada.

Montreal-based Van Houtte was founded in 1919. In addition to Van Houtte, the company's brands are Brûlerie St. Denis, Les Cafés Orient Express Coffee and Brûlerie Mont Royal. They're sold throughout North America to the office coffee market and to retailers through direct store distribution. The company does about $433 million annual sales.

Since 2001, Van Houtte has had a license to produce K-Cup portion packs for Green Mountain's Keurig single-cup brewers under the Van Houtte, Bigelow and Wolfgang Puck K-Cup brands.

Following the close of the deal, Green Mountain said it will look to sell Filterfresh, Van Houtte's coffee service operation, which reportedly serves more than 71,000 offices in most major North American cities, and overlaps with Green Mountain's existing network of independent Keurig distributors in the U.S.

Green Mountain will purchase Van Houtte from an affiliate of private equity firm Littlejohn & Co., based in Greenwich, CT. Van Houtte president and chief executive Gerard Geoffrion will remain with the company. The Canadian roaster employs approximately 1,700 people in Canada and the U.S.

The deal, expected to close by yearend, is the latest in a series of acquisitions for Green Mountain, which completed its $300 million takeover of Diedrich Coffee Inc. in May. Diedrich was also licensed to produce Keurig K-Cups.

Last month, Green Mountain announced that Italian coffee giant Lavazza will purchase a $250 million stake in the Vermont-based roaster. The two companies reported that they are exploring a further agreement under which Green Mountain and Lavazza would cooperate to develop new espresso machines, which would be manufactured by Lavazza, as well as espresso capsules for them. The jointly developed machines would complement GMCR's line of Keurig single-cup coffee brewers.

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