Business Wire

The Coca-Cola Company to Acquire Costa

Del

The Coca-Cola Company today announced that it has reached a definitive agreement to acquire Costa Limited, which was founded in London in 1971 and has grown to become a major coffee brand across the world.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20180830005927/en/

The acquisition of Costa from parent company Whitbread PLC is valued at $5.1 billion and will give Coca-Cola a strong coffee platform across parts of Europe, Asia Pacific, the Middle East and Africa, with the opportunity for additional expansion. Costa operations include a leading brand, nearly 4,000 retail outlets with highly trained baristas, a coffee vending operation, for-home coffee formats and Costa’s state-of-the-art roastery.

For Coca-Cola, the expected acquisition adds a scalable coffee platform with critical know-how and expertise in a fast-growing, on-trend category. Costa ranks as the leading coffee company in the United Kingdom and has a growing footprint in China, among other markets. Costa has a solid presence with Costa Express, which offers barista-quality coffee in a variety of on-the-go locations, including gas stations, movie theaters and travel hubs. Costa, in various formats, has the potential for further expansion with customers across the Coca-Cola system.

The acquisition will expand the existing Coca-Cola coffee lineup by adding another leading brand and platform. The portfolio already includes the market-leading Georgia brand in Japan, plus coffee products in many other countries.

Costa also provides Coca-Cola with strong expertise across the coffee supply chain, including sourcing, vending and distribution. This will be a complement to existing capabilities within the Coca-Cola system.

“Costa gives Coca-Cola new capabilities and expertise in coffee, and our system can create opportunities to grow the Costa brand worldwide,” said Coca-Cola President and CEO James Quincey. “Hot beverages is one of the few segments of the total beverage landscape where Coca-Cola does not have a global brand. Costa gives us access to this market with a strong coffee platform.”

Coffee is a significant and growing segment of the global beverage business. Worldwide, coffee remains a largely fragmented market, and no single company operates across all formats on a global basis.

“The Costa team and I are extremely excited to be joining The Coca-Cola Company,” said Costa Managing Director Dominic Paul. “Costa is a fantastic business with committed and passionate associates, a great track record and enormous global potential. Being part of the Coca-Cola system will enable us to grow the business farther and faster. I would like to say a huge thank you to our customers and to everyone in the Costa team who have helped us build the business to this position, and I look forward to the next exciting chapter in Costa’s vision of Inspiring the World to Love Great Coffee.”

Transaction details

The purchase price is £3.9 billion. This translates to approximately $5.1 billion. Upon the closing, The Coca-Cola Company will acquire all issued and outstanding shares of Costa Limited, a wholly owned subsidiary of Whitbread. This subsidiary contains all of the existing operating businesses of Costa.

Whitbread will be seeking shareholder approval for the transaction, which is expected to take place by mid-October. The deal is subject to customary closing conditions, including antitrust approvals in the European Union and China. It is expected to close in the first half of 2019.

Coca-Cola expects the transaction to be slightly accretive in the first full year, not taking into account any impact from purchase accounting. For the fiscal year 2018 (ending March 1, 2018), Costa generated revenue and EBITDA of £1.3 billion and £238 million GBP, respectively. This equates to roughly $1.7 billion in revenue and $312 million in EBITDA.

Because Coca-Cola expects the transaction to close in the first half of 2019, there is no change to 2018 guidance. The company’s long-term targets also remain unchanged. Coca-Cola will provide additional information as part of comprehensive guidance provided during the fourth quarter 2018 earnings call.

Advisers

Rothschild acted as exclusive financial adviser to The Coca-Cola Company. Clifford Chance acted as legal counsel to The Coca-Cola Company, and Skadden, Arps, Slate, Meagher & Flom acted as tax counsel to The Coca-Cola Company.

Investor conference call details

Coca-Cola is hosting a conference call with investors and analysts to discuss this announcement today, Aug. 31, 2018, at 8:30 a.m. ET. Supplementary materials to the call will be available in advance of the call on the company’s website, http://www.coca-colacompany.com, in the "Investors" section. The company invites participants to listen to a live webcast of the conference call on the company’s website, http://www.coca-colacompany.com, also located in the "Investors" section. An audio replay in downloadable digital format and a transcript of the call will be available on the website within 24 hours following the call.

About The Coca-Cola Company

The Coca-Cola Company (NYSE: KO) is a total beverage company, offering over 500 brands in more than 200 countries and territories. In addition to the company’s Coca-Cola brands, our portfolio includes some of the world’s most valuable beverage brands, such as AdeS soy-based beverages, Ayataka green tea, Dasani waters, Del Valle juices and nectars, Fanta, Georgia coffee, Gold Peak teas and coffees, Honest Tea, innocent smoothies and juices, Minute Maid juices, Powerade sports drinks, Simply juices, smartwater, Sprite, vitaminwater and ZICO coconut water. We’re constantly transforming our portfolio, from reducing sugar in our drinks to bringing innovative new products to market. We’re also working to reduce our environmental impact by replenishing water and promoting recycling. With our bottling partners, we employ more than 700,000 people, helping bring economic opportunity to local communities worldwide. Learn more at Coca-Cola Journey at www.coca-colacompany.com and follow us on Twitter, Instagram, Facebook and LinkedIn.

The fairlife® brand is owned by fairlife LLC, our joint venture with Select Milk Producers Inc. Products from fairlife are distributed by our company and certain of our bottling partners.

Forward-Looking Statements

This press release may contain statements, estimates or projections that constitute “forward-looking statements” as defined under U.S. federal securities laws. Generally, the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “will,” “plan,” “seek” and similar expressions identify forward-looking statements, which generally are not historical in nature. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from The Coca-Cola Company’s historical experience and our present expectations or projections. These risks include, but are not limited to, obesity and other health-related concerns; water scarcity and poor quality; evolving consumer preferences; increased competition; product safety and quality concerns; perceived negative health consequences of certain ingredients, such as non-nutritive sweeteners and biotechnology-derived substances, and of other substances present in our beverage products or packaging materials; an inability to be successful in our innovation activities; increased demand for food products and decreased agricultural productivity; an inability to protect our information systems against service interruption, misappropriation of data or breaches of security; changes in the retail landscape or the loss of key retail or foodservice customers; an inability to expand operations in emerging and developing markets; fluctuations in foreign currency exchange rates; interest rate increases; an inability to maintain good relationships with our bottling partners; a deterioration in our bottling partners' financial condition; increases in income tax rates, changes in income tax laws or unfavorable resolution of tax matters; increased or new indirect taxes in the United States and throughout the world; failure to realize the economic benefits from or an inability to successfully manage the possible negative consequences of our productivity initiatives; inability to attract or retain a highly skilled and diverse workforce; increased cost, disruption of supply or shortage of energy or fuels; increased cost, disruption of supply or shortage of ingredients, other raw materials, packaging materials, aluminum cans and other containers; changes in laws and regulations relating to beverage containers and packaging; significant additional labeling or warning requirements or limitations on the marketing or sale of our products; unfavorable general economic conditions in the United States; unfavorable economic and political conditions in international markets; litigation or legal proceedings; failure to adequately protect, or disputes relating to, trademarks, formulae and other intellectual property rights; adverse weather conditions; climate change; damage to our brand image or corporate reputation from negative publicity, even if unwarranted, related to product safety or quality, human and workplace rights, obesity or other issues; changes in, or failure to comply with, the laws and regulations applicable to our products or our business operations; changes in accounting standards; an inability to achieve our overall long-term growth objectives; deterioration of global credit market conditions; default by or failure of one or more of our counterparty financial institutions; an inability to renew collective bargaining agreements on satisfactory terms, or we or our bottling partners experience strikes, work stoppages or labor unrest; future impairment charges; multi-employer pension plan withdrawal liabilities in the future; an inability to successfully integrate and manage our company-owned or -controlled bottling operations or other acquired businesses or brands; an inability to successfully manage our refranchising activities; failure to realize a significant portion of the anticipated benefits of our strategic relationship with Monster; global or regional catastrophic events; risks and uncertainties relating to the transaction, including the risk that the businesses will not be integrated successfully or such integration may be more difficult, time-consuming or costly than expected, which could result in additional demands on our resources, systems, procedures and controls, disruption of our ongoing business and diversion of management’s attention from other business concerns; the possibility that certain assumptions with respect to Costa or the transaction could prove to be inaccurate; the failure to receive, delays in the receipt of, or unacceptable or burdensome conditions imposed in connection with, all required regulatory approvals and the satisfaction of the closing conditions to the transaction; the potential failure to retain key employees as a result of the proposed transaction or during integration of the businesses and disruptions resulting from the proposed transaction, making it more difficult to maintain business relationships; the response of customers, policyholders, brokers, service providers, business partners and regulators to the announcement of the transaction and other risks discussed in our company’s filings with the Securities and Exchange Commission (SEC), including our Annual Report on Form 10-K for the year ended December 31, 2017 and our subsequently filed Quarterly Reports on Form 10-Q, which filings are available from the SEC. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. The Coca-Cola Company can give no assurance that the expectations expressed or implied in the forward-looking statements contained herein will be attained and undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Non-GAAP Financial Measures

This press release contains disclosure of the EBITDA, or underlying earnings before interest, tax, depreciation and amortization, excluding income from joint ventures, and revenue of Costa for the fiscal year 2018 (ending March 1, 2018), which may be deemed to be non-GAAP financial measures within the meaning of Regulation G promulgated by the SEC. Costa uses a range of measures to monitor its financial performance, which include both statutory measures in accordance with International Financial Reporting Standards ("IFRS") and alternative performance measures which are consistent with the way that business performance is measured internally and which are believed to provide both management and investors with useful additional information about the financial performance of Costa’s business. Underlying measures of profitability represent the equivalent IFRS measures adjusted for specific items that Costa considers relevant for comparison of the financial performance of Costa's business either from one period to another or with other similar businesses. Costa's calculation of EBITDA for the 52 weeks ended March 1, 2018, is as follows:

     
£m
Underlying profit before tax 158.3
Income from joint ventures (0.2)
Net finance revenue 0.6
Underlying depreciation and amortization       79.5
Underlying EBITDA 238.2
 

The above unaudited historical financial information relating to Costa has been extracted without material adjustment from the underlying consolidation schedules used in preparing Whitbread PLC’s consolidated financial statements for the financial year ended March 1, 2018.

EBITDA is not an earnings measure recognized by GAAP and does not have a standardized meaning prescribed by GAAP; accordingly, EBITDA may not be comparable to similar measures presented by other companies. EBITDA should be considered in addition to, and not as a substitute for, or superior to, operating income, cash flows, revenue, or other measures of financial performance prepared in accordance with GAAP. EBITDA is not a completely representative measure of either the historical performance or, necessarily, the future potential of Costa.

Contact information

The Coca-Cola Company
Investors and Analysts:
Tim Leveridge, +1-404-676-7563
or
Media:
Scott Leith, +1-404-676-8768

Om Business Wire

Business Wire
Business Wire
24 Martin Lane
EC4R 0DR London

+44 20 7626 1982http://www.businesswire.co.uk

(c) 2018 Business Wire, Inc., All rights reserved.

Business Wire, a Berkshire Hathaway company, is the global leader in multiplatform press release distribution.

Følg saker fra Business Wire

Registrer deg med din epostadresse under for å få de nyeste sakene fra Business Wire på epost fortløpende. Du kan melde deg av når som helst.

Siste saker fra Business Wire

Rockwell Automation Opens Registration for 2018 Automation Fair18.9.2018 14:54Pressemelding

Registration is now open for the 2018 Automation Fair, hosted by Rockwell Automation and members of its global PartnerNetwork program. The 27th annual Automation Fair will be held Nov. 12-15 at the Pennsylvania Convention Center. The event brings together approximately 10,000 manufacturers and producers from across the globe to learn about the newest innovations in automation and take part in training, industry forums and networking events. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20180918005725/en/ Automation Fair will feature more than 150 exhibits showcasing the latest product innovations for industrial manufacturing and production. Hosted by Rockwell Automation and members of its PartnerNetwork, the event offers more than 400 hours of educational opportunities through forums, hands-on labs and technical sessions. (Photo: Business Wire) “The next industrial transformation is here – and meeting its demands requires a m

Seoul Semiconductor Supplies Optimal LEDs ‘SunLike’ to Large Scale Applications of Lumitronix in Germany18.9.2018 13:33Pressemelding

Seoul Semiconductor Co., Ltd. (KOSDAQ 046890), a market leader in LED (light emitting diode) design and manufacturing, supplied the innovative LEDs “SunLike” to Lumitronix, the LED specialist located in Baden-Württemberg, Germany. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20180918005626/en/ The Modules with SunLike LEDs. (Photo: Business Wire) In cooperation with Seoul Semiconductor, Lumitronix has also developed three optimal SunLike modules to provide customers with a standardized solution and expand its adoption in the lighting market. Two of the LED modules comply with the standard of Zhaga, a global association of lighting companies, for Book 7 L56W2 and Book 7 L28W2 and enable easy replacement in various industrial applications. The modules named LinearZ are available in one feet and two feet length. The model LinearZ 280-26 measures 280 mm and is equipped with 26 SunLike LEDs and has a light output of up to 700 lm.

Andersen Global Continues South American Expansion With BKM Berkemeyer18.9.2018 13:30Pressemelding

Andersen Global announces further growth in South America with the signing of a Collaboration Agreement with BKM Berkemeyer, one of the oldest and largest law firms in Paraguay. With two locations in the capital city of Asunción, the firm has a headcount of nearly 150 professionals, including ten Partners and over 60 lawyers. Established in 1951, BKM Berkemeyer is led by Managing Partner Hugo Berkemeyer and provides legal solutions to both domestic and international clients. The firm delivers advice in all areas of law, including business and corporate, taxation, litigation, environment, employment and intellectual property, with a notable expertise in international transactions and business matters. BKM Berkemeyer also specializes in M&A’s, joint ventures, foreign investment, infrastructure, project finance and financial transactions, advising also on issues regarding telecommunications, water and energy projects. Hugo commented, “Our focus at BKM Berkemeyer has been to provide flexib

175 Million Europeans Have Sleep Apnoea, Highlighting Scale of Global Health Crisis18.9.2018 13:05Pressemelding

Roughly 175 million Europeans have obstructive sleep apnoea, according to a late-breaking abstract presented by ResMed today at the European Respiratory Society’s annual ERS Congress in Paris. Leading researchers estimate 90 million Europeans have moderate to severe sleep apnoea, meaning they experience at least 15 breathing events an hour during sleep. These statistics are based on the latest scoring rules for determining one’s apnoea–hypopnoea index (AASM 2012) and are connected with a 16-country study announced in May 2018 that revealed an estimated 936 million people worldwide have sleep apnoea, a chronic sleep-disordered breathing condition associated with increased risk of mortality and reduced quality of life. The new global prevalence is nearly tenfold higher than the previous one – 100 million – estimated by the World Health Organization in 2007. European countries with the highest prevalence are: Russia, 40 million Germany, 26 million France, 24 million Ukraine, 13 million Sp

Loomis Sayles Announces Senior Loan Portfolio Manager Retirement18.9.2018 13:00Pressemelding

Loomis, Sayles & Company, an affiliate of Natixis Investment Managers, announced today that Kevin Perry, portfolio manager on the senior loan team, will retire in March 2019 after 17 years with the company and 37 years in the industry. All senior loan portfolios will continue to be co-managed by portfolio managers John Bell and Michael Klawitter, who have been members of the team for 17 and 16 years, respectively. The team oversees approximately $10.7 billion1 in institutional and retail assets for global clients. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20180918005187/en/ “Kevin has embodied Loomis Sayles’ values of collaboration, humility and prudent risk-taking every day since he and John joined us in 2001,” said Kevin Charleston, chief executive officer. “Kevin and John are considered pioneers in the bank loan market and their efforts have led to clients entrusting us with the management of more than $10 billion in b

SIA Has Provided the New Real-Time Gross Settlement System in Denmark18.9.2018 13:00Pressemelding

SIA, European hi-tech company, leader in payment infrastructures and services, has further strengthened its positioning in the Nordic countries, by providing Danmarks Nationalbank with the new real-time gross settlement system (RTGS) that connects banks, mortgage banks and settlement systems. This RTGS platform is already in operation by the central banks of Norway and Sweden and it will soon go live in Iceland too. The up-to-date technology infrastructure developed by SIA has replaced the previous in-house system that has been in use by the Central Bank of Denmark since 2001. The new RTGS system, that secures safe and real-time transfer of Danish kroner, ensures continued efficiency, operational reliability, functional sophistication and simpler maintenance of the system. In this initiative, SIA has used its wholly-owned subsidiary Perago, based in Pretoria (South Africa) and specialized in central bank solutions. Later this year, Denmark will be the first non-euro country to particip