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Sun Capital sells Timothy’s Coffees of the World

Sun Capital Partners, a private investment firm specialising in leveraged buyouts and other investments in companies, has sold its affiliated portfolio company Timothy’s Coffees of the World to Green Mountain Coffee Roasters for approximately USD157m in cash, subject to adjustment.

Timothy’s is a supplier of specialty coffees to offices, hotels, grocery stores, retailers and food service establishment throughout Canada and the US.

Immediately prior to the purchase, Timothy’s sold its franchise restaurant operation to Bruegger’s Enterprises, another Sun Capital portfolio company which operates fast casual neighborhood bakery-cafes in 24 states. The restaurant operation includes 139 locations across Canada doing business under the Timothy’s World Coffee, Michel’s Baguette Bakery Café, and mmmuffins brands, as well as Levain Bakery, a high-end specialty bakery.

The Bruegger’s acquisition of the Timothy’s retail operation expands the company’s footprint into Canada and also adds new distribution channels for the Bruegger’s kettle-boiled New York-style bagels.

"Timothy’s is a true growth and success story where revenues and profits were nearly doubled in 2009 over last year despite a challenging economic environment," says M. Steven Liff, senior managing director of Sun Capital. "We invested prudently to grow Timothy’s with new product lines, greater production capacity, improved systems, and expanded distribution, and enjoyed a productive partnership with George Michel and Domenic Della Penna, and the rest of the management team. We are pleased that our investors are being well compensated for the value that has been created at Timothy’s through a timely cash sale to the right strategic owner, and wish GMCR well with the business going forward."

Among the enhancements Sun Capital operators and the management team implemented were a significant expansion of Timothy’s packaging capacity to increase K-Cup production to over 250 million cups per year, signing new long-term licensing agreements, and launching products into multiple channels including specialty coffees such as Emeril’s licensed varieties, the Original Donut Blend and Kahlua flavoured coffee.

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