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PE-backed tea retailer David’s Tea prepares for IPO: Reuters

(Reuters) – Privately held Canadian specialty tea retailer David’s Tea, whose investors include Lululemon Athletica Inc founder Chip Wilson and Highland Consumer Fund, has selected banks for a potential initial public offering, according to two people familiar with the matter.

Goldman Sachs Group Inc, JPMorgan Chase & Co and Bank of America Corp have been assigned lead roles in the IPO, which could come later this year, the people said.

The sources asked not to be identified because the matter is private. David’s Tea, Goldman Sachs, JPMorgan and Bank of America declined to comment.

Based in Montréal, privately held David’s Tea was founded in 2008 by 28-year old David Segal and his cousin Herschel Segal, the founder of the Le Château Inc clothing chain.

David’s Tea sells over 150 types of tea, including exotic infusions from around the world, organic teas and infusions in more than 100 locations throughout the U.S. and Canada. It also sells a number of unique flavoured teas including birthday cake, blueberry jam and chocolate chili chai.

David’s Tea competes with Teavana, which was acquired in 2012 by Starbucks for US$620 million.

The company’s backers Highland Consumer Fund, a Boston-based growth investor, and Chip Wilson made a $14 million minority investment in 2012.

(Reporting by Olivia Oran in New York; Editing by Chizu Nomiyama)

(This story has been edited by Kirk Falconer, editor of peHUB Canada)

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