Fast-growing Peabodys Coffee Inc., (OTCBB:PBDY) announced yesterday that it has entered in to a letter of intent to acquire Beantrees, Inc., a Sacramento-based certified organic coffee company. The dominant Beantrees brand consists of 16 company owned retail units, 8 licensed operations and a well-established wholesale and retail distribution network. Beantrees’ company owned operating units include 12 high visibility kiosks located within the corporate facilities of Yahoo!, Hewlett Packard and Intel. Financial terms were not disclosed.

“This acquisition will significantly increase our revenue, and the added cash flow will contribute strongly to our earnings per share goals,” said Todd Tkachuk, Chairman of Peabodys. “We have been operating in, and analyzing the specialty coffee market for some time and more importantly, we believe this to be the first in a series of powerful growth steps for the new company. We are also pleased that the combined company will focus on environmentally and socially responsible initiatives. Peabodys espresso bars will start introducing Beantrees Organic coffees immediately.”

Since 1993, Beantrees has dedicated its business exclusively to developing the organic coffee market in North America. By offering espresso bar service, wholesale and retail distribution of both bulk and packaged coffees through the corporate, educational and entertainment venues, Beantrees has been instrumental in bringing organic coffee to the mainstream consumer. Through the Beantrees Yahoo! Store, the company distributes over 23 varieties of organic coffee, all third party certified by QAI International.

Beantrees has developed a network of various coffee programs through several distribution channels. Organic office coffee service is available anywhere in California through Daiohs First Choice Services, who currently delivers to thousands of individual business locations in the Golden State. Additionally, any Northern California food service operator or culinary business can order directly through Alliant Food Service (http://www.Alliantlink.com), another key Beantrees distribution channel.

Barrie Gromala, Founder, President, CEO of Beantrees will join Peabodys as Senior Vice President and will serve on the Board. “We have established a powerful leadership position in the explosive organic coffee market. Organic coffee is the fastest growing sector of the specialty coffee market for the last four years in a row. Our distinctive brand, our commitment to organics, and the outstanding quality of our coffee has been instrumental to Beantrees success — the majority of our growth has come through referral and by request. The consumer is increasingly aware of the momentum and importance of the organic market, and they are responding with increasing demand, fueling our growth,” noted Gromala.

Barry Gibbons, former Chairman/CEO of Burger King Corp. and a Director of Peabodys, added, “This move benefits both brands, and the synergies are powerful. We have one core competence with two distinct concepts — both with high-growth potential. We are also adding a significant distribution presence in the wholesale, foodservice, licensing and full service markets.”

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This release contains forward-looking statements. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. Readers should not place undue reliance on forward-looking statements, which reflect management’s view only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances.