Sun Capital: sells Timothy’s World Coffee

Boca Raton / FL. (scp) Sun Capital Partners Inc. (Sun Capital), a private investment firm specializing in leveraged buyouts and investments in market-leading companies, 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. for approximately 157 million USD 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 United States.

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 U.S. 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 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, Timothy´s, Bruegger´s

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 USD. 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.

Timothy´s World Coffee Retail Operations 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 percent of its stores are located in Ontario.

Bruegger´s Enterprises Inc., an affiliate of Sun Capital, 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. Founded in 1983, Bruegger´s is headquartered in Burlington, Vermont and supports its neighbors in every community it serves.