Peet's Coffee & Tea Inc. has partnered with private equity firm Next World Group to buy Mighty Leaf Tea, as the coffee house looks to accelerate its tea business.
Mighty Leaf Tea, headquartered in San Rafael, California, was founded in 1996 by Gary Shinner and Jill Portman. The company is known for artisan, blended teas and compostable, mesh tea pouch.
Peet's will continue to produce its signature tea brand. The buyer is in the middle of expanding its retail coffee shop empire, and plans to have 60 more stores by the end of the year. The brand, headquartered in Emeryville, California, makes specialty coffees and teas. The group went private in 2012.
San Francisco-based Next World Group will hold a minority stake in the partnership. The firm has a history of investing in mid-size consumer specialty food and beverage businesses.
Coffee and tea chain Starbucks (Nasdaq: SBUX) won Mergers & Acquisitions M&A Mid-Market Deal of the Year award in 2012 for purchasing tea company Teavana to expand tea offerings. The Peet's acquisition is in line with Mergers & Acquisitions' predictions for more M&A in the food and beverage sector.