Key Takeaways
- • Kraft Heinz (NYSE: KHC) agreed to divest its North America coffee business to an affiliate of One Rock Capital Partners at an enterprise value of $650 million.
- • Kraft Heinz will retain a 30% non-controlling equity stake in the business, giving it continued exposure to the brands' long-term performance.
- • Net cash proceeds after taxes are expected to be approximately $500 million, which will be used to pay down debt; the company says the deal is growth and margin accretive.
- • The business includes Maxwell House, Gevalia, Nabob, Yuban, Tassimo, Ethical Bean and Sanka, and roughly 250 full-time employees plus coffee plants in Jacksonville, Florida and Vancouver, British Columbia are expected to transfer.
- • The transaction is expected to close in mid-2027, subject to regulatory approval and customary closing conditions.
Summary
Kraft Heinz announced a definitive agreement to sell its North America coffee business to an affiliate of One Rock Capital Partners, LLC, a value-oriented, operationally focused private equity firm with experience in the food and beverage sector. The transaction values the business at an enterprise value of $650 million, according to the company's Business Wire release.
The divestiture covers the Maxwell House, Gevalia, Nabob, Yuban, Tassimo, Ethical Bean and Sanka brands. Kraft Heinz will keep a 30% non-controlling equity stake in the business. The company expects approximately $500 million in net cash proceeds after taxes, which it plans to use to reduce debt. Management characterized the deal as growth and margin accretive and as consistent with its strategy of directing investment and resources toward priority brands.
The transfer is expected to include the assets, brands, customer support and functional resources needed to run the business. About 250 full-time employees across supply chain, sales, marketing, finance, people and performance, and R&D are expected to move to One Rock, along with coffee manufacturing facilities in Jacksonville, Florida and Vancouver, British Columbia. Closing is targeted for mid-2027, subject to regulatory approval and other customary conditions.
Steve Cahillane, CEO of Kraft Heinz, described the transaction as a meaningful step in unlocking value from the portfolio and accelerating the company's transformation. Tony W. Lee, Managing Partner of One Rock, said the firm intends to increase investment across the brand portfolio to drive growth and innovation and strengthen relationships with retail partners. Rothschild & Co and Centerview Partners LLC advised Kraft Heinz financially, with McGuireWoods LLP as legal adviser. Deutsche Bank Securities Inc. and Fifth Third Securities advised One Rock financially, with Latham & Watkins LLP as legal adviser.
The divestiture covers the Maxwell House, Gevalia, Nabob, Yuban, Tassimo, Ethical Bean and Sanka brands. Kraft Heinz will keep a 30% non-controlling equity stake in the business. The company expects approximately $500 million in net cash proceeds after taxes, which it plans to use to reduce debt. Management characterized the deal as growth and margin accretive and as consistent with its strategy of directing investment and resources toward priority brands.
The transfer is expected to include the assets, brands, customer support and functional resources needed to run the business. About 250 full-time employees across supply chain, sales, marketing, finance, people and performance, and R&D are expected to move to One Rock, along with coffee manufacturing facilities in Jacksonville, Florida and Vancouver, British Columbia. Closing is targeted for mid-2027, subject to regulatory approval and other customary conditions.
Steve Cahillane, CEO of Kraft Heinz, described the transaction as a meaningful step in unlocking value from the portfolio and accelerating the company's transformation. Tony W. Lee, Managing Partner of One Rock, said the firm intends to increase investment across the brand portfolio to drive growth and innovation and strengthen relationships with retail partners. Rothschild & Co and Centerview Partners LLC advised Kraft Heinz financially, with McGuireWoods LLP as legal adviser. Deutsche Bank Securities Inc. and Fifth Third Securities advised One Rock financially, with Latham & Watkins LLP as legal adviser.
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