J.M. Smucker buys Rowland Coffee

J.M. Smucker Co. has paid $360 million for Miami-based Rowland Coffee Roasters, whose brands include Cafe Pilon, Cafe Bustelo, Cafe Oquendo, Medaglia d'Oro and El Pico brands.

A news release said Rowland's 2010 revenue of more than $110 million makes it the nation's largest coffee company marketing to Hispanics.

The acquisition includes a manufacturing, distribution and office facility in Miami, but a release from J.M. Smucker (NYSE: SJM) indicates those operations will be closed.

J.M. Smucker plans to consolidate manufacturing into a plant it already has in New Orleans.

Officials with Rowland and J.M. Smucker could not immediately be reached to provide information on how many employees may lose their jobs, or what will happen to the space Rowland currently occupies.

The architect of Rowland's growth was Jose A. Souto, who restarted the family's coffee business in Miami after Fidel Castro came to power in Cuba. The company had roots going back to 1865 in the island nation.

Soto acquired Cafe Pilon in either 1967 or 1968, according to varying news accounts, from a family named Rowland. The company went on to acquire the Cafe Bustelo, Cafe Oquendo, Medaglia d'Oro and El Pico brands.

Now, the acquisition will boost the coffee operations of J.M. Smucker, which already markets the Folgers and Dunkin' Donuts brands.

"The addition of the Cafe Bustelo and Cafe Pilon coffee brands, each with a rich heritage, provides us with a unique opportunity to establish a strong presence in coffee with Hispanic consumers in the U.S.," said Richard Smucker, executive chairman and co-CEO of J.M. Smucker.

J.M. Smucker completed the $360 million transaction with cash on hand and borrowings under its existing credit facility, the news release said. The transaction is expected to contribute about 5 cents a share to fiscal year 2012 earnings, excluding one-time transaction costs.

The consolidation of operations is expected to achieve additional cost savings of about 10 cents a share after the completion of consolidation, excluding one-time costs.

One-time costs of the acquisition are estimated to total $25 million to $30 million, including about $15 million of noncash charges associated with closing the Miami facilities. About $10 million of the one-time costs are expected to be incurred in fiscal year 2012, with the remaining incurred through 2014.

Greenberg Traurig, P.A. represented Rowland in the sale. Its team was led by Patricia Menendez-Cambo, chairwoman of the Global Practice Group; shareholders Randy A. Bullard, Alexandra Aguirre and Enrique J. Martin; and associates Enrique A. Conde and Edilsa Ruiz.

"It was a pleasure representing a Miami-based U.S.-Hispanic company in the sale of its family business with historical roots dating back to the 1860s in Cuba," Bullard said.

Oscar Vila, of Vila Padron & Diaz P.A., longtime counsel to the company, served as co-counsel.

"By the year 2050, nearly one-quarter of the U.S. population is expected to be Hispanic," he said. "We believe that companies and products targeting this population will be well-positioned, both today and in the future."

From: South Florida Business Journal