N – Starbucks Corp plans to acquire tea store operator Teavana Holdings Inc for $620 million in cash, furthering its push beyond its flagship coffee business.
Starbucks, the world's largest coffee shop operator, said it will pay $15.50 per share in cash for Teavana, a 54 percent premium to the company's closing price on the New York Stock Exchange on Tuesday.
Shares of Atlanta-based Teavana jumped 52.6 percent to $15.46, in afternoon trade on the New York Stock Exchange.
"The acquisition of Teavana supports our growth strategy to innovate with new products, enter new categories and expand into new channels of distribution," said Jeff Hansberry, who will run the Teavana business at Starbucks. He is president of channel development and emerging brands for Starbucks.
The company already bought juice company Evolution Fresh and sandwich maker La Boulange Bakery. Starbucks bought Evolution Fresh for $30 million in November 2011, and announced a deal for the bakery in June.
Janney Capital Markets analyst Mark Kalinowski said Starbucks could aim for synergies, including selling Teavana's teas in its coffee shops and possibly through other outlets.
News of a deal was first reported by the Atlanta Business Chronicle.
Starbucks said it expects the deal to close by the end of the year and to add 1 cent per share in earnings in fiscal 2013.
Starbucks shares fell 2.9 percent to $48.86 on Nasdaq. (Reporting By Martinne Geller in New York; editing by John Wallace and Leslie Adler)