Sun Capital Sells Timothy’s to Green Mountain

Sun Capital Partners has sold Timothy’s Coffees of the World, Inc. to Green Mountain Coffee Roasters, Inc. for approximately $157 million in cash. The sale returns money to a Sun Capital Partners V.

Press release:
Sun Capital Partners, Inc. (“Sun Capital”), a private investment firm specializing in leveraged buyouts and investments in market-leading companies, today announced that Timothy’s Coffees of the World, Inc. (“Timothy’s”), one of its affiliated portfolio companies, has been purchased by Green Mountain Coffee Roasters, Inc. (NASDAQ: GMCR) for approximately $157 million in cash, subject to adjustment. Timothy’s is a leading supplier of specialty coffees to offices, hotels, grocery stores, retailers and food service establishment throughout Canada and the U.S.

Immediately prior to the purchase, Timothy’s sold its franchise restaurant operation to Bruegger’s Enterprises, Inc., another Sun Capital portfolio company which operates fast casual neighborhood bakery-cafes in 24 states. The restaurant operation includes 139 locations across Canada doing business under the Timothy’s World Coffee, Michel’s Baguette Bakery Café, and mmmuffins® brands, as well as Levain Bakery, a high-end specialty bakery. The Bruegger’s acquisition of the Timothy’s retail operation not only expands the company’s footprint into Canada, but also adds new distribution channels for the Bruegger’s kettle-boiled “New York-style” bagels.

“Timothy’s is a true growth and success story where revenues and profits were nearly doubled in 2009 over last year despite a challenging economic environment,” said M. Steven Liff, senior managing director of Sun Capital. “We invested prudently to grow Timothy’s with new product lines, greater production capacity, improved systems, and expanded distribution, and enjoyed a productive partnership with George Michel and Domenic Della Penna, and the rest of the management team. We are pleased that our investors are being well compensated for the value that has been created at Timothy’s through a timely cash sale to the right strategic owner, and wish GMCR well with the business going forward.”

Among the enhancements Sun Capital operators and the management team implemented were a significant expansion of Timothy’s packaging capacity to increase K-Cup production to over 250 million cups per year, signing new long-term licensing agreements, and launching innovative products into multiple channels including specialty coffees such as Emeril’s licensed varieties, the Original Donut Blend and Kahlua flavored coffee.

The sale of Timothy’s, a Sun Capital Partners V, LP portfolio company, follows the recent successful exit of Tarami K.K., an industry pioneer in processing fruit and fruit-flavored gelatin cups, resulting in attractive returns to limited partners of Sun Capital Partners IV, LP. During the third and fourth quarters of 2009, Sun Capital Partners IV and V also made significant dividend payments with respect to investments in CanGro Foods, a Canadian marketer of canned fruit, tomato, vegetable, and soup under such known brands as Del Monte and Aylmer, and Sunrise Growers-Frozsun Foods, a maker and distributor of fresh and frozen strawberry products.

About Sun Capital Partners, Inc. (www.suncappart.com)
Sun Capital Partners, Inc. is a leading private investment firm focused on leveraged buyouts, equity, debt, and other investments in market–leading companies that can benefit from its in–house operating professionals and experience. Sun Capital affiliates have invested in and managed more than 210 companies worldwide since Sun Capital’s inception in 1995 with combined sales in excess of $40 billion. Sun Capital has offices in Boca Raton, Los Angeles, and New York, as well as affiliates with offices in London, Paris, Frankfurt, Shenzhen, and Shanghai. Sun Capital, one of the most active private investment firms in the U.S., closing 170 transactions from 2002 through 2009, was the recipient of the M&A Advisor Private Equity Firm of 2008 award.

About Timothy’s World Coffee Retail Operations
Timothy’s World Coffee owns and operates 139 retail stores under the Timothy’s World Coffee brand, as well as mmmuffins and Michel’s Baguette quick service casual restaurants. For over 30 years, Timothy’s has provided its customers with top quality products and services, and these traits are still the foundation of the company today. Approximately 70% of its stores are located in Ontario.

About Bruegger’s Enterprises, Inc. www.brueggers.com
Bruegger’s Enterprises, Inc., an affiliate of Sun Capital Partners, Inc., is a leader in the fast casual restaurant segment. Bruegger’s is dedicated to serving delicious, wholesome food that brings guests back again and again. In 290 neighborhood bakery-cafes in 24 states and the District of Columbia, Bruegger’s offers a warm, comfortable setting for guests to enjoy a wholesome meal with family and friends. Famous for authentic New York-style, boiled and baked bagels, Bruegger’s entire menu is free of trans-fats and features a Fair Trade CertifiedTM coffee everyday from Green Mountain Coffee®. Bruegger’s bakers use their expertise to bake not only bagels, but an array of fresh breads including honey wheat, hearty white and the exclusive Softwich. Guests can count on innovative menu items, including unique cream cheese flavors, delicious breakfast sandwiches and wraps, hand-tossed salads, hearty soups, signature and custom order sandwiches and desserts. Founded in 1983, Bruegger’s is headquartered in Burlington, Vermont and supports its neighbors in every community it serves.