LavAzza to Acquire North American Brand as Industry Consolidates

(Bloomberg) -- LavAzza, the 122-year-old Italian company, has agreed to acquire an 80 percent stake in a Canadian maker of organic coffee, expanding in North America at a time when consumers are seeking more upscale caffeine options.

The C$215 million ($160 million) deal for Kicking Horse Coffee, based in British Columbia, is the latest sign that European buyers are looking to consolidate the industry. JAB Holding Co., a closely held investment firm that manages the fortune of Austria’s Reimann family, has spent billions buying up U.S. brands in recent years.

Tepid economic growth in Western Europe has pushed companies there to seek mergers and distribution deals across the Atlantic. In addition to JAB and LavAzza, which has sales of more than $2 billion, Nestle and other European companies have targeted North America for growth.

The move is part of a broader push by LavAzza, Italy’s best-selling coffee brand, to build its reputation in other countries. The closely held, family-run company has boosted its product distribution in North America in recent years, and its beans and cans and K-cups have become a more common sight in stores. Now it will have a 20-year-old organic brand popular in Canada to add to its portfolio.

“Organic fair-trade coffee is one of the fastest-growing trends at the international level, and in North America in particular,” Antonio Baravalle, LavAzza’s chief executive officer, said in a statement.