Three private-equity firms have joined to acquire a significant equity stake in The Coffee Bean & Tea Leaf, with sights set on accelerated growth in Asia, as well as the U.S., the company said Thursday.
Terms were not disclosed for the transaction, which was completed Thursday.
The capital investment comes from global buyout firm Advent International, with offices in New York and Boston, represented by Will Kussell, former president and chief brand officer of Dunkin’ Donuts.
Joining Advent are CDIB Capital, the overseas investment arm of Asian merchant banking group China Development Financial; and Mirae Asset Private Equity, the private-equity arm of Asian financial services group Mirae Asset Financial Group. Both are based in Hong Kong.
The two Asia-based partners indicated that they see opportunity for growth of The Coffee Bean brand in that region, where the chain has close to 600 locations.
“We have followed The Coffee Bean for many years, in particular its rapid expansion in Asia, and have been impressed by the strength of the brand and its connection with its consumer base,” said HY Kim, managing director at CDIB Capital. “We believe that the company’s authentic Southern California brand heritage and global resonance provides a strong base for the future.”
Founded in 1963 and celebrating its 50th anniversary this year, The Coffee Bean has grown at a steady pace, primarily overseas.
Mel Elias, The Coffee Bean’s president and chief executive, said the first Asian location opened in Singapore in 1996 and has grown rapidly throughout the region. Korea, for example, has about 250 locations.
The brand was well accepted in Asia, in part because The Coffee Bean had long focused on premium tea in addition to coffee — offering a leg up in a part of the world that had yet to adopt coffee-drinking ways.
“The Coffee Bean has incredible brand recognition in Asia,” said Elias. “We’ve only barely scratched the surface in China. Since 1996, The Coffee Bean has established itself as a premier, world-class American brand, and we see a lot of white space.”
Elias said the investment will also allow for corporate growth in the U.S., particularly in the chain’s core market of Southern California.
The brand’s emphasis on tea will also be an advantage in the U.S., where consumer interest in tea is booming, Elias said. “When I started about 15 years ago, tea was about 4 percent of sales. Now it’s 15 percent, and it’s our fastest growing category,” he noted.
The Los Angeles-based Coffee Bean chain currently includes 313 units in the U.S., of which 178 are company owned; and 629 internationally, most of which are franchise operated.
The Coffee Bean’s largest shareholders were members of the Sassoon family, lead by brothers Sunny and Victor Sassoon. They remain significant shareholders, with Sunny continuing as executive chair of the board and Victor Sassoon remaining chief executive of the Asia Pacific.
As part of the deal, Kussell of Advent will serve as vice chairman of The Coffee Bean’s board. In addition to growing sales at Dunkin’ Donuts from about $1 billion in 1994 to about $5 billion in 2009, Kussell is known for establishing Dunkin’ Donuts’ international growth strategy.
Within the restaurant space, Advent’s portfolio also includes Bojangles’ Restaurants Inc., based in Charlotte, N.C. In the retail sector, the firm also holds investments in Lululemon Athletica, Hudson News, Party City and Serta Simmons.
Contact Lisa Jennings at [email protected].
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