Littlejohn in C$600m coffee roasting deal

Middle market firm Littlejohn & Co. has agreed to take private Van Houtte, a gourmet coffee roasting company, for C$600 million. It’s the second Canadian company the US firm has agreed to buy in the last week.

Greenwich, Connecticut-based Littlejohn & Co. has agreed to buy Van Houtte, a North American gourmet coffee roasting company and franchise operator, for C$600 million ($542 million; €400 million), including debt assumption.

Under terms of the agreement, Van Houtte shareholders will receive C$25 per share, a 44 percent premium over the volume-weighted average price of C$17.36 for the 20-day period ending prior to the firm’s January announcement that it would seek strategic alternatives.

Since that time, the Montreal-headquartered company contacted approximately 50 potential buyers in the US, Canada, Europe and Asia, it said.

The transaction is subject to shareholder, regulatory and court approvals. It is expected to close shortly after a shareholder meeting in June or July.

The buyout deal also includes a non-solicitation covenant and gives Littlejohn the right to match any superior proposal. Should Van Houtte accept an alternative offer, Littlejohn would command a C$10 million break-up fee.

Post-transaction, Van Houtte will not experience significant changes in operations, staffing levels or senior management, according to a statement. Van Houtte was founded in 1919 and employs more than 1,900 people in Canada and the US. Its coffee is distributed via coffee services, retail stores, café-bistros and online shopping.

Littlejohn agreed to buy another Montreal-based business last week: packaging manufacturer Intertape Polymer Group. That deal was valued at $500 million.

The recent investments are being made from Littlejohn’s third fund, which it increased in March to $850 million. The fund originally closed in May 2005 on $650 million.

Littlejohn was founded in 1996 by Angus Littlejohn after his split from the New York-based firm he co-founded in 1988, Joseph Littlejohn & Levy (now JLL Partners).