Starbucks Corp. (Seattle), the world's largest coffee shop chain, said it has agreed to acquire rival Seattle Coffee Co.'s North American operations for about $72 million in cash, expanding its line of premium coffee offerings.
The transaction calls for Starbucks to acquire Seattle Coffee's U.S. and Canadian units from parent company AFC Enterprises Inc., which owns a variety of restaurant chains, including Popeyes Chicken & Biscuits, Church's Chicken, Torrefazione Italia Coffee and Cinnabon. The companies expect to close the transaction within 90 days.
Starbucks will acquire Seattle Coffee Co.'s 51 company-operated Seattle's Best Coffee cafés, 21 company-operated Torrefazione Italia Coffee cafés and its existing franchise business in North America of 78 franchised retail Seattle's Best Coffee cafés. AFC will continue to franchise the Seattle's Best Coffee brand in retail locations in Hawaii and existing Seattle's Best Coffee franchised international markets and U.S. military bases.
This transaction supports Starbucks' long-term strategy to expand and build upon its leadership position in the super premium coffee segment within the foodservice and grocery businesses. The sale of Seattle Coffee Co. allows AFC to focus more of its energy on its core business of franchising restaurant concepts.
“AFC can fully concentrate on its core strategy of franchising retail restaurants, bakeries and international cafés, along with increasing our financial flexibility and strengthening our overall financial position through the sale of these brands,” says Frank Belatti, chairman and ceo of AFC Enterprises. “We are proud of Seattle Coffee Co.'s ability to grow the Seattle's Best Coffee and Torrefazione Italia Coffee brands in multiple retail and wholesale channels.”
Starbucks operates more than 6000 retail locations in North America, Latin America, Europe, the Middle East and the Pacific Rim.