JAB
Does anyone have any insight into this company?
They seem to be acquiring tons of companies for billions of dollars (Peet’s,Snapple,Pret,Panera) etc.
Where is all of this money coming from and what is there competitive advantage over other PE firms when making these acquisitions?
They're trying to become the leaders of the "coffee" category.
Owned by Germany’s Reimann family,23 90% of JAB Holding belongs to four of the late Albert Reimann Jr.'s nine adopted children.24 They are descendants of chemist Ludwig Reimann, who, in 1828, joined with Johann Adam Benckiser (founder of the namesake chemical company). Reimann married one of Benckiser's daughters and ended up owning the business. Great-grandson Albert Reimann Jr. took over after his father died in 1952, and added consumer goods
wiki
In Europe it's common for a wealthy multi-generational family to have an 'investment vehicle', many of which are publicly traded.
The Rothschilds, for instance, have what used to be called Paris-Orleans, the old name (until 2015) of the publicly traded (Euronext: ROTH) vehicle that holds the overlapping interests of the English and French branches of the family. Edmond de Rothschild, the Swiss branch, is really unhappy over the renaming and has actually litigated against the other family branches.
GBL is a holding company controlled by two families, Frère of Belgium and Desmarais of Canada.
JAB is effectively a consumer private equity fund with no fund lifecycle. The investment horizon is infinite, it is the definition of patient capital. It's the HoldCo for a German family which is one of the wealthiest on the planet (worth at least $19b). Five members of the family are billionaires: four are worth more than $4b.
They have been on a tear buying up food-related assets. Since 2012 they've been on a $25b buying spree trying to Frankenstein the global leader in coffee. They have Krispy Kreme too. They used to own Jimmy Choo (initiated a sale in 2017). They owned a big chunk of Reckitt Benckiser (Durex, Lysol, Clearasil, etc.) but have cut that back.
The competitive advantage is that they get to enact strategic moves that will take longer to bear fruit than any private equity fund could realistically stomach. (This, for the record, is why you see the megafunds going out to market with some 15-year lifecycle vehicles as well. They want to capture a portion of the market that only true patient capital sources [family offices, publicly traded YieldCo's] are currently touching.)
It makes sense. When you're at that level of wealth, absolutely nothing about your quality of life is getting impacted by the ratio of cash to illiquid assets in your portfolio, so you may as well acquire mature, cash-bearing, counter-cyclical assets for the long run. (This is the easy reason behind why they have gotten out of Jimmy Choo and IPO'd the Coty brand in 2013. Those businesses are more cyclical than counter-cyclical.)
Edit: wow, I did all that off memory from a deep dive awhile back. Just looked on Google for a refresh and there's a really prominent public site that must be a new addition. I am shocked, they were a very off-the-radar family. My guess is that the press their coffee acquisition spree generated led them to disclose more.
Great info.
To add to this, total AUM is somewhere between €70-80bn and it includes more than only the Reimann family wealth. JAB also raised significant outside money from other wealthy families and investment vehicles.
Can't really compete with these guys, the prices they pay won't get you to the PE-type returns that LBO funds are shooting for - speaking from experience.
WSJ has done some profiles on them. They are making quite the splash with these (controversial) acquisitions
https://www.wsj.com/articles/the-secretive-company-that-pours-americas-…
https://www.wsj.com/articles/SB10001424127887324731304578193380376860070
Google for more background / articles
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