MILAN – JDE Peet’s, the world’s biggest pure play coffee company, made its dazzling stock debut on Friday raising €2.25 billion ($2.5 billion) in an Amsterdam listing that valued the firm at €15.6 billion ($17.3 billion). It took just three days to sell shares in JDE Peet’s in the second-largest IPO of the year world-wide to date.
Beijing-Shanghai High-Speed Railway Corp. raised $4.4 billion on the Shanghai Stock Exchange in January, Dealogic data shows.
Shares in the company, which also owns the Jacobs, Douwe Egberts, Peet’s Coffee, Jacobs and L’OR brands, surged as much as 18% above the offer price of €31.50 ($35), trading at around €37 ($41) by lunchtime in the Dutch capital.
Amsterdam-based business sold 700 million euros in new shares, which the company will use to pay off debts. Existing shareholders Acorn and Mondelez sold another 1.55 billion euros worth of stock for a total of 2.55 billion euros. That amounts to 16.5 percent of the company’s shares.
Acorn Holdings is controlled by German investor JAB, the investment firm behind Panera, Pret A Manger, Krispy Kreme and Keurig Dr Pepper (KDP). Acorn is expected to own 62% of JDE Peet’s following the listing, with Mondelez retaining 23%, according to a statement.
Due to the coronavirus pandemic, the coffee maker had to forego the usual pre-IPO roadshows, replacing them with digital-only variants.
The process gathered pace over the last three weeks, with virtual roadshows completed in just 72 hours, instead of management travelling for at least a fortnight to meet investors at fancy hotels around the world, two sources close to the deal quoted by Reuters said.
The gamble to launch an IPO in the midst of the pandemic paid off, drawing big-name investors like Quantam Partners and Fidelity Management and Research.
JDE Peet’s said it intends to focus on increasing its household penetration in the United States, driving growth in emerging markets, expanding its retail coffee stores business in China and capturing attractive out-of-home opportunities.
JDE Peet’s: Offer Highlights
- The Offer Price has been set at €31.50,1 implying a market capitalisation of €15.6 billion.2
- The Offer consisted of a primary and a secondary component. 22,222,222 newly issued Ordinary Shares (the “New Offer Shares”) have been placed under the Offer, raising approximately €700 million of primary gross proceeds. 39,544,514 existing Ordinary Shares have been placed under the Offer by Acorn Holdings B.V. (“Acorn Holdings”, a company owned by JAB Holding Company S.à r.l. (“JAB”) and other co-investors) and 9,661,835 existing Ordinary Shares by Mondelez Coffee HoldCo B.V. (“Mondelez Coffee HoldCo”, a subsidiary of Mondelēz International, Inc. (“Mondelēz International”)) (together, the “Selling Shareholders”) (together, the “Existing Offer Shares” and together with the New Offer Shares, the “Offer Shares”).
- The Existing Offer Shares (excluding any Over-Allotment Shares, as defined below) raised gross proceeds of approximately €1.55 billion, and the Offer Shares (excluding any OverAllotment Shares) raised gross proceeds of approximately €2.25 billion.
- The Offer Shares represent approximately 14.4% of the issued share capital of the Company immediately after settlement. If the Over-Allotment Option is exercised in full, the total number of Offer Shares will represent a maximum of approximately 16.5% of the total issued share capital of the Company.
- Pursuant to their respective commitments, Quantum Partners LP and Palindrome Master Fund LP (funds managed by Soros Fund Management LLC); various funds and accounts under the management of Fidelity Management and Research (“FMR”); and JAB Holdings B.V. (“JAB Holdings”) (together, the “Cornerstone Investors”) have subscribed for an aggregate amount of €761 million at the Offer Price.
- In light of the strong response by investors to the Offer, the closing of the Offer was brought forward. The Offer was multiple times oversubscribed at the Offer Price with strong demand from institutional investors globally. The Offer consists solely of private placements to certain institutional investors in various jurisdictions, including the Netherlands. There was no public offering in any jurisdiction.
- The Company intends to use the net proceeds of the issue of the New Offer Shares to repay part of its outstanding debt in order to further strengthen its balance sheet (leverage ratio estimated to be around 3.6x on the Settlement Date, as defined below).3 The Company is targeting a leverage ratio below 3.0x by the end of the first half of the financial year ended 31 December 2021.
- Listing of, and first trading in, the Ordinary Shares on an “as-if-and-when-issued/delivered” basis on Euronext Amsterdam under the symbol “JDEP” will commence today Friday, 29 May 2020.
- The settlement of the Offer is expected to take place on Tuesday, 2 June 2020 (the “Settlement Date”).
- Certain post-closing lock-ups have been agreed, which for the Company, the Selling Shareholders and JAB Holdings are for a period ending 180 days after the settlement date and for each member of the Company’s board of directors (the “Board”) and each member of the senior management team for a period ending 360 days after the settlement date. These lock-ups are subject to exceptions as set out in the Prospectus and possible waiver by the Joint Global Coordinators (as defined below).
- The Company has appointed BNP Paribas, Goldman Sachs International and J.P. Morgan Securities plc as joint global coordinators for the Offer (the “Joint Global Coordinators”).
Share capital and major shareholders
Immediately after settlement of the Offer, 495,386,168 Ordinary Shares will be in issue. 498,719,501 Ordinary Shares will be in issue, if the Over-Allotment Option is exercised in full.
Immediately after settlement of the Offer, Acorn Holdings will hold 308,234,524 Ordinary Shares, representing approximately 62.2% of the issued share capital of the Company (excluding the OverAllotment Option); decreasing to 302,302,847 Ordinary Shares, representing approximately 60.6% of the issued share capital of the Company, if the Over-Allotment Option is exercised in full.
Immediately after settlement of the Offer, JAB,4 through Acorn Holdings and JAB Holdings, will hold an economic interest in 188,423,126 Ordinary Shares, representing approximately 38.0% of the issued share capital of the Company (excluding the Over-Allotment Option); decreasing to 184,980,381 Ordinary Shares, representing approximately 37.1% of the issued share capital of the Company, if the Over-Allotment Option is exercised in full.
Immediately after settlement of the Offer, Mondelēz International, through Mondelez Coffee HoldCo, will hold 115,723,073 Ordinary Shares, representing approximately 23.4% of the issued share capital of the Company (excluding the Over-Allotment Option); decreasing to 114,273,798 Ordinary Shares, representing approximately 22.9% of the issued share capital of the Company, if the Over-Allotment Option is exercised in full.
JDE Peet’s: Cornerstone Investments
Pursuant to their respective commitments, Quantum Partners LP and Palindrome Master Fund LP (funds managed by Soros Fund Management LLC); various funds and accounts under the management of FMR; and JAB Holdings have subscribed for an aggregate amount of €761 million at the Offer Price (the “Cornerstone Investments”).
The Cornerstone Investments were for the following amounts:
(i) Quantum Partners LP and Palindrome Master Fund LP (funds managed by Soros Fund Management LLC): €100 million (in aggregate) corresponding to 3,174,603 Ordinary Shares;
(ii) FMR: €361 million corresponding to 11,460,317 Ordinary Shares; and
(iii) JAB Holdings: €300 million corresponding to 9,523,809 Ordinary Shares.
J.P. Morgan Securities plc acting as stabilisation manager (the “Stabilisation Manager”) on behalf of the Underwriters has been granted an over-allotment option of up to 15% of the Offer Shares (the “OverAllotment Option”).
The Over-Allotment Option consists of 3,333,333 additional Ordinary Shares to be issued by the Company, 5,931,677 additional Ordinary Shares to be sold by Acorn Holdings and 1,449,275 additional Ordinary Shares to be sold by Mondelez Coffee HoldCo (together, the “OverAllotment Shares”).
The Over-Allotment Option can be exercised within 30 calendar days after the commencement of conditional dealings in the Offer Shares to cover over-allotments, if any, in connection with the Offer or facilitate stabilisation transactions, if any.
1 Taking into account the conditions described in “The Offer” in the Prospectus.
2 Assuming no exercise of the Over-Allotment Option.
3 After the repayment of part of its outstanding debt with such net proceeds.
4 JAB Holding Company S.à r.l. is in turn, indirectly, controlled by Agnaten SE, its majority shareholder, and Lucresca SE. Agnaten SE and Lucresca SE, indirectly, share voting and investment control over JAB and its subsidiaries.