Gryphon recaps coffee co

Gryphon Investors has returned roughly 100 percent of its invested equity in Eight O’ Clock Coffee Company. The San Francisco-based firm acquired the business in November 2003, and in the two successive Novembers since, has taken out a dividend through a recapitalisation.

Since November 2003, when Gryphon Investors first acquired Eight O’Clock Coffee Company, the firm has completed two dividend recaps, the latest coming earlier this week.

Gryphon Investors has executed two dividend recaps in Eight O’Clock since November, 2003

The San Francisco-based firm originally acquired the coffee maker from US grocer The Great Atlantic & Pacific Tea Company (A&P) in a deal that at the time was reportedly valued at $107 million. The latest recap allowed Gryphon to return all of its invested capital back to its limited partners, while its stake in the business remains unchanged.

BNP Paribas, the company’s existing lead lender, is financing the latest recap, while New York Life Capital Partners is augmenting the new facility with a mezzanine tranche.

The firm did not disclose any of the financial terms of either dividend recaps, although a source close to the transaction noted that Gryphon has now returned around 100 percent of its original equity investment.

Gryphon, which is currently raising its third fund, Gryphon Partners III, LP, has notched a number of exits so far in 2005. In June, the group sold sales-force training outfit Miller Heiman to Leeds Weld & Co.; in May, Gryphon unloaded its control stake in Bright Now! Dental Inc. through a secondary sale to Freeman Spogli; and in April, the firm sold MSD Ignition to ValueAct Capital, a deal that achieved a roughly 175 percent IRR.

Regarding the Eight O’Clock investment, Kurt Kaull, a partner at Gryphon and head of its consumer and retail group, said in a statement that the firm worked at building the company’s presence in the “value gourmet” segment of the coffee market.

Gryphon originally used its 1999-vintage, $424 million Gryphon Partners II for the investment.