Cooks Global Foods has fresh plans to put New Zealand coffee on the global stage.
Following the planned purchase of coffee brand Mojo for $19 million, the NZX-listed company is looking to the United States for market domination.
Cooks will pay $11.7m in cash, $2m in shares and take on $5.3m of debt to acquire Mojo. The deal relies on the company raising enough money to fund the cash component, and Mojo securing a lease variation and completing acceptable March accounts.
The acquisition is the next step in Mojo's expansion, Cooks Global Foods executive chairman Keith Jackson said. It will see the brand open more stores in North America, adding to its current one in Chicago, Illinois.
"The American market is growing rapidly in terms of appreciation of good coffee and Australasian style of coffee," Jackson said.
"We have a common vision for growth in the US. We'll open a lot more stores in Chicago as well as in other cities."
Mojo founder and chief executive Steve Gianoutsos said he got emotional yesterday announcing news of the sale to staff.
"This isn't a sail off into the sunset kind of the deal, this is more like a recapitalisation of my assets so that we can grow more international," Gianoutsos said.
He said the "merger" was a good fit for the brands.
"There's skills that the Cooks guys bring to the table and skills we bring to the table and I think it's a good blend. They've always had the franchise model, we've always had the store ownership model so I think together we'll have a strong company."
The popular coffee brand, which has a large Wellington presence, has 36 cafes in New Zealand, four in Japan, two in China and one in Chicago, Illinois.
Moving forward, Jackson said Cooks Global Foods and Mojo would follow the expansion path of Australian coffee brand Bluestone Lane which had successfully opened stores throughout the US.
Gianoutsos said there would be no operational changes following the sale, and that he would stay in the role of chief executive. "Back here nothing changes, it's business as usual. No one loses their job, nothing changes."
The US was an attractive option for expansion, he said, given its population of 325 million people.
"For most people in the US coffee is just a commodity," Gianoutsos said.
"[Americans] are a bit behind the rest of the world on the growth curve when it comes to our style of cafe ... [the market] is saturated but not with what we do."
There is one cafe for every 1500 people in New Zealand. In the US, there's one cafe for every 6500.
"New Zealand is very competitive and that's why in part everyone has to be consumer focused, so that gives us almost a leg up," Jackson said.
"There's big opportunity. Chicago itself is a city of 8 million people, almost 3 million in the main city."
Gianoutsos said: "Wellington has 24 shops and that's got a central population of over 120,000 people ... so if we can't do at least what we've got in Wellington in Chicago it would be disappointing."
Cooks Food Group also operates coffee brand Esquires, outside of New Zealand.