Caribou Files $90M IPO

BROOKLYN CENTER, MN-Gourmet coffeehouse operator Caribou Coffee Co. Inc. on Tuesday filed an initial public offering of common stock that could be worth up to $90 million. Caribou did not disclose how many shares it would sell, or at what price.

According to documents provided to the Securities and Exchange Commission, Merrill Lynch & Co. and Thomas Weisel Partners will serve as joint book-running managers for the IPO, with SunTrust Robinson Humphrey acting as a co-manager.

According to the SEC documents, Caribou has opened 107 company-operated locations in the past two fiscal years. As of May 29, 2005, it had opened 17 coffeehouses in 2005 and has plans to open an additional 63 to 73 coffeehouses this year and 105 to 115 coffeehouses in 2006. The company says it intends to further penetrate those markets in which it already exists, while also expanding into new markets.

“Our strategy is to expand our concept into a nationally recognized brand in the United States while adding select international locations through licensing,” the company said in its filing with securities regulators.

Caribou, which is now 84.7% owned by Middle East-based investor, Arcapita, has sold licensing rights to a Middle Eastern businessman to develop coffeehouses there. Arcapita is a global investment group with $1.2 billion in assets. The filing did not disclose how much of the ownership Arcapita would retain after the offering.

“The Middle East is the best market in world,” Caribou CEO Michael Coles tells GSR. “Because there is not much alcohol there, coffee shops are a real popular meeting place; it’s a good place in the world for us to be.”

As of May 29, the chain had 322 coffeehouses, including three licensed locations and four joint venture locations. The coffeehouses are located in 12 states and the District of Columbia, including 151 coffeehouses in Minnesota and 54 coffeehouses in Illinois.