Peet’s Coffee (PEET) Has New Platform For Long Term Growth
November 12, 2009 9:45 AM
Investors seem to give the stock of Peet's Coffee & Tea, Inc. (NASDAQ: PEET) an uptick. This happened after Peet’s Coffee made a proposal to takeover Diedrich Coffee, Inc. (NASDAQ: DDRX). The takeover – a cash and stock deal – is worth $ 213 million. More than 90% of Diedrich’s revenue comes from making and selling Green Mountain Coffee Roasters Inc's (NASDAQ: GMCR) K-Cups.
Diedrich Coffee is a wholesale roaster and distributor. After Peet’s Coffee announced the deal, Wall Street pushed up the stock’s price by 11%. The reason for such euphoric response is that this will give Peet’s Coffee a chance to get into the single cup coffee market, which is fast growing.
The Investors Business Daily quotes David Tarantino, analyst, Robert W. Baird & Co as saying that the acquisition gives Peet’s Coffee a platform for enjoying long term growth. In this fiscal year, Diedrich's sales at $ 62 million registered a growth of 56%.
