The Tata Group on Sunday announced the acquisition of a US-based company for $220 million.
"Tata Coffee has acquired the US-based Eight O'Clock Company," a group spokesperson said.
The company informed the Bombay Stock Exchange that it has signed a definitive agreement to acquire the Eight 0'Clock Coffee Company (EOC), USA, from Gryphon Investors for a total acquisition price of $220 million.
EOC has over 100 years of brand history and retail coffee experience in the US and is a leading player in the branded whole bean segment and a category leader in the value gourmet segment in the US retail market.
Within the broad US retail coffee category, EOC is the third largest brand by volume behind Folgers and Maxwell House, the statement said.
EOC had net sales of $109 million and EBITDA of $27 million in 2005.
The acquisition provides a sizeable entry platform and an established brand to Tata Coffee in the $21 billion US coffee market, the company said.
The acquisition, which will be financed through a combination of equity and non-recourse debt, will transform Tata Coffee from a regional coffee player in the Indian market to a significant global player with strong and powerful brands in the Indian and US coffee markets, it added.
This acquisition is in line with the company's objective to move up the value chain and become a leading and fully integrated player in the global coffee industry, Tata Coffee said.