MONTREAL -- Gourmet coffee roaster, marketer and distributor Van Houtte Inc., which offers its coffees across Canada and the United States through distribution channels that include coffee services, retail stores, caf a-bistros and online shopping, said that it has entered into an agreement to be acquired and taken private by a company controlled by Littlejohn & Co. LLC, a Greenwich, Conn.-based private equity firm.
Littlejohn will acquire all of the issued and outstanding shares of the company for a consideration of $25 per share. The total enterprise [image-nocss] value of the transaction is approximately $600 million including the assumption of existing indebtedness. The $25 per share consideration represents a 44% premium over the volume-weighted average price of $17.36 for the 20-day period ending prior to the announcement date, Jan. 12, 2007.
Also, the 25 cents-per-share special dividend payable on June 15, 2007 to shareholders of record on June 7, 2007 will be maintained; however, the regular quarterly dividend of 8 cents per share will not be declared.
Speaking on behalf of the founding and principal shareholders, Paul-Andr a Guillotte, chairperson of the Strategic Orientation Committee, said: The decision to put up for sale our controlling interest in Van Houtte was a difficult one to make, but this transaction is the right one for all the stakeholders of the company. Much has been done in the last 25 years to build Van Houtte into what is now one of the largest and finest roasters and distributors of gourmet coffee in North America. The time has now come for a new group of owners to sponsor the next stage of the company's growth. Following a comprehensive and rigorous process, we strongly support the proposed transaction. Our vision from the outset has always been to build Van Houtte into a North American leader. The company has found in Littlejohn a partner who shares this vision.
Van Houtte said its board unanimously approved the transaction (with interested directors abstaining) upon a unanimous recommendation of its Strategic Orientation Committee and also resolved to recommend to the company's shareholders that they vote in favor of the transaction.
The transaction will also be subject to certain other customary conditions, including receipt of a limited number of regulatory approvals and no material adverse change in the company's business. The transaction is not subject to any financing condition.
The agreement also provides for, among other things, a non-solicitation covenant on the part of Van Houtte, a right in favor of Littlejohn to match any superior proposal and the payment of a termination fee to Littlejohn in the amount of $10 million under certain circumstances.
Following the transaction, Van Houtte will continue to be headquartered in Montreal under the Van Houtte name and the leadership of its existing management team. No significant changes in staffing levels, strategic orientations or operations are expected as a result of the transaction.
We have found in Van Houtte a well-managed company with a superior product, a strong brand and heritage and a solid development plan, said Michael I. Klein, president of Littlejohn.
We are confident that Van Houtte's management can deliver on their plan for broad-based growth, deployment of the Van Houtte brand across Canada and the United States and optimal use of the Van Houtte Coffee Services network, added David E. Simon, managing director of Littlejohn.
Owners may be new, but the company will stay the same, said Van Houtte's President and CEO Jean-Yves Monette.
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