Chobani Acquires La Colombe Coffee Roasters for $900M

Chobani, an American food company specializing in strained yogurt, bought La Colombe coffee roaster and retailer for $900 million. The New York-headquartered company said the purchase will allow it to expand its operations to other fields beyond its yogurt business.

The addition of a coffee company to its portfolio is said to be a big addition to Chobani because the coffee business is very different from its yogurt manufacturing and retailing. This will also signal the yogurt maker's entry into the coffee ready-to-drink (RTD) market.

Announcement and Payment Terms of the Acquisition Deal

Chobani officially announced its acquisition of La Colombe on Friday, Dec. 15. The company said this will broaden its beverage offerings and overall business.

As per Reuters, Chobani is paying for the acquisition through a combination of cash on hand, a newly issued $550 million term loan, and in exchange for the minority equity stake in the coffee company that Keurig Dr Pepper's KDP holds.

At any rate, It was noted that the firm had been continuously expanding its product categories after withdrawing its IPO in the United States. Currently, La Colombe is operating 32 cafes in major states, including Los Angeles, Philadelphia, Boston, New York, Chicago, Texas, and Washington, D.C., so the deal is truly beneficial to Chobani.

Company Arrangement After the Acquisition

Once the acquisition is completed, La Colombe will officially become part of Chobani. But while it will now be owned by the Greek yogurt maker, La Colombe Coffee Roasters will still continue to do business as an independent company.

Chobani said that they prefer this organizational arrangement because this approach will allow better collaboration and sharing of expertise between the two sides. In this way, both companies will be able to preserve their respective unique identity and innovation that each is known for as well.

"At a time when the industry has faced challenges to grow sales, Chobani has delivered double-digit, volume-led sales growth, and considerable margin expansion. We have never been stronger or better positioned to chart our next chapter of growth," Hamdi Ulukaya, founder and chief executive officer of Chobani, said in a press release. "We have already made an investment in the coffee category with our creamers and are excited about bringing La Colombe into the Chobani family, and offering the delicious, high-quality cold brew and ready-to-drink craftmanship of La Colombe to the next generation of consumers, powered by a strong distribution partner in KDP."

Bob Gamgort, chairman and CEO of KDP, also commented, "La Colombe is a unique brand and well positioned to continue its strong growth trajectory, including upside as its ready-to-drink line expands availability through our Company-owned DSD network and with premium K-Cup pods now in the market. Both as a strategic partner and a minority shareholder, we are excited by the path ahead."

Photo by: Chobani Press Release