Privately held Joh. A. Benckiser, which invests in consumer goods brands, will pay $73.50 per share, a 29 percent premium to Peet's closing stock price of $57.16 on Friday. The companies said Monday the deal was worth about $1 billion.
Shares of Peet's jumped $16.54, or 28.9 percent, to $73.70 in midday trading Monday. Over the past year, the stock has traded in a range of $51.16 to $77.60.
Mitchell Pinheiro of Janney Capital Markets said in a client note that Peet's was a logical acquisition target because of its strong brand and growth potential. But the analyst was a bit surprised by the going-private deal.
"We thought Peet's would make more sense for a larger packaged food company that would have more marketing muscle, distribution power and cost synergies, as opposed to being part of a private equity portfolio," he wrote.
BDT Capital, a Chicago merchant bank, is a minority investor and adviser in the buyout.
Peet's was founded in 1966 in Berkeley, Calif., by Alfred Peet. The company gets more than half its revenue from its coffee shops and the rest from grocery sales, home delivery and sales to food service and offices.
Benckiser already holds a minority stake in D.E. Master Blenders 1753. The company was created when Sara Lee Corp. split into two businesses.
Peet's Coffee & Tea Inc. has about 13.3 million outstanding shares, according to FactSet. The current management and employees will remain with the company and its headquarters will stay in Emeryville, Calif.
The acquisition, which was unanimously approved by Peet's board, is expected to close in about three months. A majority of Peet's outstanding stock must be voted in favor of the deal at an upcoming special shareholders meeting.
Benckiser is the majority owner of Coty Inc., which is known for its celebrity fragrances and OPI nail polish. Coty announced last month that it is planning to go public and hopes to raise $700 million in an initial public offering. Bensckiser also owns Labelux, a luxury goods company with brands such as Jimmy Choo, Bally and Belstaff.