Reborn Coffee Announces Letter of Intent to Acquire Majority Stake in Derin Lezzetler, an Istanbul, Turkey-based Artisan Snack and Frozen Bakery Producer
Reborn Coffee (NASDAQ: REBN) has signed a Letter of Intent to acquire a 55% majority stake in Derin Lezzetler, an artisan snack and frozen bakery producer based in Istanbul, Turkey. This acquisition aims to expand Reborn's presence in the health-conscious food market and penetrate regions like the US, Europe, Middle East, and Asia Pacific. Established in 2015, Derin Lezzetler is known for its gluten-free and artisan snacks, with a distribution network that includes global brands such as Starbucks and Costa Coffee. This move aligns with Reborn's vision to enhance its product offerings and meet evolving customer needs. The acquisition will allow Reborn to leverage Derin Lezzetler's established relationships and expand its global footprint, focusing on introducing these products to American consumers. The partnership will concentrate on product line enhancement, food safety, and innovation for health-conscious consumers.
- Acquisition of 55% majority stake in Derin Lezzetler.
- Expansion into health-conscious food market.
- Penetration into US, Europe, Middle East, and Asia Pacific regions.
- Established distribution network with global brands like Starbucks and Costa Coffee.
- Enhancement of product offerings and catering to evolving customer needs.
- Leverage of Derin Lezzetler’s established relationships for global footprint expansion.
- Potential financial risks associated with international expansion.
- Integration challenges between Reborn Coffee and Derin Lezzetler.
- Uncertainty in finalizing the acquisition agreement.
Insights
The acquisition of a 55% stake in Derin Lezzetler by Reborn Coffee is a significant strategic move. This acquisition provides Reborn Coffee an established foothold in the artisan snack and frozen bakery market, particularly with a strong presence in the health-conscious segment. From a financial perspective, this diversification could be favorable as it may open new revenue streams and reduce reliance on coffee sales alone. Moreover, Derin Lezzetler's established distribution network with major global brands like Starbucks and Costa Coffee ensures a ready market for Reborn Coffee's expanded product lines. However, investors should watch for potential integration risks, possible increases in debt to finance the acquisition and any cultural or operational challenges in merging the two companies' operations.
From a market perspective, entering the health-conscious segment with gluten-free and artisan snacks aligns with current consumer trends towards healthier eating. This move can strengthen Reborn Coffee's positioning in the market, especially in regions like the US where there is a rising demand for health-focused products. The acquisition also provides immediate brand recognition and market penetration through Derin Lezzetler's existing relationships with well-known brands. However, successful market penetration will depend on how well Reborn Coffee can leverage these relationships and maintain product quality across expanded geographies. The US market, while lucrative, is also highly competitive and Reborn Coffee will need to differentiate itself to capture a significant market share.
Legally, an acquisition of this scale involves significant due diligence to ensure compliance with international trade laws and regulations. Given Derin Lezzetler's operations across multiple countries, Reborn Coffee will need to navigate varying legal landscapes, including import/export regulations, food safety standards and potential foreign investment restrictions. Properly addressing these legal challenges is essential to ensure a smooth integration and avoid future legal complications. Additionally, the Letter of Intent is just the beginning; the terms of the final agreement will reveal more about the financial and operational commitments required from both parties. Investors should be aware of potential legal hurdles that might affect the timeline or cost of the acquisition.
Acquisition will Enable Reborn Products to be Distributed Globally
BREA, Calif., May 21, 2024 (GLOBE NEWSWIRE) -- Reborn Coffee, Inc. (NASDAQ: REBN) ("Reborn", or the "Company"), a California-based retailer of specialty coffee, today announced that it has signed a Letter of Intent (LOI) to acquire a
Derin Lezzetler has been at the forefront of producing high-quality gluten-free and artisan snacks since its establishment in 2015. The company has developed a robust distribution network that includes globally recognized brands such as Starbucks, Caffe Nero, Gate Plus, Costa Coffee, Migros, Shell, Espressolab, and Coffy, making its products available worldwide.
"This Letter of Intent aligns perfectly with our vision to enhance our product offerings and cater to the evolving needs of our customers," said Farooq Arjomand, Chairman of Reborn Coffee. "Derin Lezzetler’s commitment to quality and innovation in the health food sector presents a valuable addition to our business. Furthermore, this partnership will accelerate our plans to expand our presence in the US market, introducing these artisan and health-focused products to American consumers."
Derin Lezzetler’s expertise in the development and distribution of gluten-free and grab-and-go products complements Reborn Coffee’s commitment to healthy and quality. The acquisition, once finalized, will enable Reborn Coffee to leverage Derin Lezzetler’s established relationships and expand its footprint in the global market and the United States.
"We are excited to join forces with Reborn Coffee and embark on this new journey together," expressed Kerim Sukan, founder of Derin Lezzetler. "With Reborn Coffee’s global reach and our shared commitment to quality, we are poised to achieve remarkable growth and continue delivering innovative products to our customers, especially in the lucrative US market."
The strategic acquisition will also focus on enhancing the product line, maintaining high standards of food safety, and continuing to innovate while serving the needs of health-conscious consumers across the globe.
About Derin Lezzetler
Derin Lezzetler is a Turkish company based in Istanbul, specializing in the production of artisan snacks and frozen bakery products. Founded in 2015, the company is recognized for its high-quality, health-conscious products, including gluten-free, vegan, raw, ketogenic, and no-added-sugar snacks. Derin Lezzetler has established a robust distribution network and collaborates with globally recognized brands such as Starbucks, Caffe Nero, Gate Plus, Costa Coffee, Migros, Shell, Espressolab, and Coffy.
About Reborn Coffee
Reborn Coffee, Inc. (NASDAQ: REBN) is focused on serving high quality, specialty-roasted coffee at retail locations, kiosks, and cafes. Reborn is an innovative company that strives for constant improvement in the coffee experience through exploration of new technology and premier service, guided by traditional brewing techniques. Reborn believes they differentiate themselves from other coffee roasters through innovative techniques, including sourcing, washing, roasting, and brewing their coffee beans with a balance of precision and craft. For more information, please visit www.reborncoffee.com.
Forward-Looking Statements
All statements in this release that are not based on historical fact are “forward-looking statements.” While management has based any forward-looking statements included in this release on its current expectations, the information on which such expectations were based may change. Forward-looking statements involve inherent risks and uncertainties which could cause actual results to differ materially from those in the forward-looking statements, as a result of various factors including those risks and uncertainties described in the Risk Factors and Management’s Discussion and Analysis of Financial Condition and Results of Operations sections of our recent filings with the Securities and Exchange Commission (“SEC”) including our Form 10-K for the fiscal year of 2023, which can be found on the SEC’s website at www.sec.gov. Such risks, uncertainties, and other factors include, but are not limited to, the Company’s ability to continue as a going concern as indicated in an explanatory paragraph in the Company’s independent registered public accounting firm’s audit report as a result of recurring net losses, among other things, the Company’s ability to successfully open the additional locations described herein as planned or at all, the Company’s ability to expand its business both within and outside of California (including as it relates to increasing sales and growing Average Unit Volumes at our existing stores), the degree of customer loyalty to our stores and products, the impact of COVID-19 on consumer traffic and costs, the fluctuation of economic conditions, competition and inflation. We urge you to consider those risks and uncertainties in evaluating our forward-looking statements. We caution readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. The Company undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.
Contacts
Investor Relations Contact:
Chris Tyson
Executive Vice President
MZ North America
REBN@mzgroup.us
949-491-8235
Company Contact:
Reborn Coffee, Inc.
ir@reborncoffee.com
FAQ
What is the recent acquisition announcement by Reborn Coffee related to?
How will Reborn Coffee's acquisition of Derin Lezzetler affect its market presence?
What products is Derin Lezzetler known for?
Which global brands are part of Derin Lezzetler’s distribution network?
What is the strategic intent behind Reborn Coffee’s acquisition?
When was Derin Lezzetler established?
What are the potential benefits of Reborn Coffee acquiring a stake in Derin Lezzetler?
What are the risks associated with Reborn Coffee's acquisition of Derin Lezzetler?
