US coffee ship chain Starbucks has said it would buy rival Seattle Coffee Co.’s North American operations for US$72m.
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Under the cash transaction, Starbucks will take on Seattle Coffee’s 150 US and Canadian stores currently held by AFC Enterprises, reported Reuters.
Starbucks chairman Howard Schultz said the company plans to keep the Seattle’s Best Coffee and Torrefazione Italia Coffee stores and flavours intact.
“This is the first time that we have reached the conclusion (to offer) multiple brands,” Schultz told Reuters by telephone. “The new brands give us a significant leg up to build a much bigger business at the wholesale and food service level.”
The deal will boost Starbucks’ coffee shop base by only 2.3% from its current 6,458 units, but Seattle Coffee’s wholesale coffee business, with distribution to 12,000 outlets, could have more of an impact.
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By GlobalData“It’s another avenue that Starbucks can take toward reaching it goal of 20% (annual) revenue growth,” Dan Geiman, an analyst at McAdams Wright Ragen, was quoted by Reuters as saying.
