NETHERLANDS – The German privately-held conglomerate, JAB Holdings is pushing ahead with the Euronext Amsterdam listing of its JDE Peet’s coffee business, expecting to generate as much as €2 billion (US$2.2bn) in what ranks as Europe’s biggest IPO this year despite the uncertainty that COVID-19 has cast over the markets.
JAB, which oversees the wealth of Germany’s billionaire Reimann family, said earlier this week that the public offering is expected to take place in the coming weeks, subject to market conditions and other relevant considerations.
The offer is expected to comprise a primary offering of newly issued shares by the company and a secondary offering of existing shares.
The plan to float the world’s largest pure-play coffee business and Nestlé’s biggest rival in selling the beverage through retail outlets is expected to generate €700m from the issuance of new shares, with this being used to pay down debt.
Analysts at Taiwanese wealth management company, Crest View International, reported that JAB is expecting to raise between €1.5bn and €2bn in total from the IPO, with the remainder coming from current shareholders such as food group Mondelez International, who will have the option of selling down its 26% stake.
“JAB will not sell any of its own holdings and will continue to be the largest shareholder,” reported Michael Kennedy, Head of Corporate Trading at Crest View International.
“Mondelēz International has valued its investment in JDE and we are very pleased to continue our relationship with JDE Peet’s,” said Dirk Van de Put, Chairman and Chief Executive Officer of Mondelēz International.
“We believe that the strength of the global portfolio of brands and the clear strategic path forward will help the company continue to build on along tradition of innovation and dedication to serving its customers and consumers.”
The Group is the world’s largest pure-play coffee and tea group by revenue, serving approximately 130 billion cups of coffee and tea in the financial year ended 31 December 2019 in more than 100 developed and emerging countries.
In FY 2019, the Group generated total revenue of €6.9 billion, of which 79% was derived from 44 markets where it held a number one or number two market position in consumer packaged goods (“CPG”)or Out-of-Home sales channels.
Crest View says that the decision to push the listing ahead reflects JAB’s belief that the coronavirus’ social and economic effects will last for months if not years, but that the coffee market will remain resilient.
Higher demand for coffee in the first quarter of 2020 helped push larger rival Nestlé to its fastest quarterly growth in nearly five years, as the pandemic gained momentum.
To prepare for the IPO, JAB merged the US retail coffee brand Peet’s with Jacobs Douwe Egberts Group, the world’s second-biggest coffee roaster after Nestlé, and overhauled its management.
Casey Keller, Chief Executive Officer of the Company said, “We believe JDE Peet’s is well-positioned for growth and we look forward to attracting new shareholders who can participate in our exciting future.
“Thanks to the hard work and dedication of our teams around the world, particularly during the past few extraordinary months, we are poised to build on our role as a global leader in coffee and tea.”
“We believe the launch of JDE Peet’s into the public markets will provide additional opportunities for growth and shareholder value creation,” said Olivier Goudet, Chief Executive Officer and Managing Partner of JAB, and Chair-designate of the Company’s board of directors.
The lead banks on the JDE Peet deal are BNP Paribas, Goldman Sachs and JPMorgan Chase.