Sara Lee announced last week that it has signed an agreement to acquire Café Damasco, a coffee business based in the southern region of Brazil. The acquisition price represents a multiple of around one time annual sales.

With its premium positioned Damasco brand and several smaller brands, Café Damasco has a leading regional position in the southern state of Parana. Total net sales of the Café Damasco company in 2009 were close to BRL 100 million (appr. US$ 60 million).

“The acquisition of Café Damasco will create a stronger foothold for Sara Lee in the Brazilian territory, given Damasco’s strong market position in the southern part of Brazil. We will benefit from Damasco’s strong sales and distribution network in the South. The transaction will also
deliver manufacturing synergies in our facility in the Sao Paulo region, as well as an improved competitive position in the Northeast thanks to the excellent Damasco manufacturing facility in that area,” said Frank van Oers, chief executive officer, Sara Lee international beverage and
bakery.

“With our current brands Pilão and Caboclo, we already have a relevant market position in the central regions of Sao Paulo and Rio de Janeiro, which account for roughly half of the total Brazilian coffee market.”

Brazil is the number one coffee producing country in the world and the second-largest coffee consuming country. Sara Lee is the market leader in Brazil, offering a variety of brands, including its core coffee brands: Pilão, Caboclo, Café do Ponto, Moka, and Seleto.

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