Terms of the deal, which was completed Friday, were not disclosed. Both Bruegger’s and Timothy’s are owned by subsidiaries of private equity firm Sun Capital Partners Inc. Bruegger’s, through a subsidiary called ThreeCaf Brands Canada Inc. will assume ownership of Timothy’s three restaurant brands: Timothy’s World Coffee, mmmuffins and Michel’s Baguette Bakery Cafe.
The restaurants, which are located throughout Canada, are primarily franchised operations. Bruegger’s now serves as the franchisor for the three brands’ 128 stores and corporate owner of 12 company units. In addition, Sun Capital also sold Timothy’s Coffees’ coffee-roasting arm to Green Mountain Coffee Roasters Inc. for about $157 million.
Jim Greco, president and chief executive of Burlington-based Bruegger’s Enterprises, said the company plans to grow all three of Timothy’s restaurant brands. Greco also noted that the deal will be beneficial on a number of levels, including giving Bruegger’s an instant platform in the lucrative specialty coffee segment, something it did not have before.
“This acquisition provides some great opportunities for both companies,” he said. “It is also a great opportunity to share our product expertise. We talk about introducing Bruegger’s at mmmuffins … and Timothy’s Coffee brings to us that expertise on how to make and market espresso-based beverages. This gives us a lot of knowledge we can implement right away.”
Greco said he expects to open the first U.S.-based Timothy’s Coffee unit sometime next year in a northeastern market. “We do plan to bring the Timothy’s Coffee brand to the U.S., and in Canada intend to expand the Michel’s brand,” he said. “As for the mmmuffins brand, we’re going to explore an introduction to Bruegger’s Bagels, perhaps by co-branding [the two chains].”
“We’ll test that initially at a few stores and see how it goes,” Greco added. “What we’re looking to do is see if we can obtain an average increase in unit volume … and if it doesn’t work, we’ll deal with it at that time.”
Aggregate sales for all three Timothy restaurant brands total about $75 million, Greco noted. He added that Bruegger’s plans to open 15 namesake new stores in the U.S. by the first quarter of 2010. The fast-casual chain reported annual revenue of more than $200 million in 2008. Greco was named Nation’s Restaurant News Operator of the Year at this year’s Multi-unit Foodservice Operators, or MUFSO, conference.
Jimmy Davis with Colliers Spectrum Cauble exclusively represents Bruegger's in site selection for the Georgia market. They currently have one leased signed for a location at Northside Drive and Powers Ferry Road and plan on opening at least three stores in 2010.