NEW YORK (
) -- In a continued expansion of its in-store food and drinks products,
(SBUX - Get Report)
, a tea-inspired drinks chain, for $15.50 a share, in an all cash deal that values the company at $620 million.
The move follows Starbucks previous acquisitions of Evolution Fresh, a fruit juices specialist, and La Boulange, a bakery chain - and further proves chief executive Howard Schultz's commitment to grow the world's leading coffee chain through a mix of new store openings, product launches and acquisitions.
Starbucks also said it considers Teavana to be a third deal, in a string of acquisitions that meets the company's "Blueprint for Growth," a
that resembles the one employed by IT services giant
(IBM - Get Report)
Heading into 2013, CEO Schultz will now need to prove he can deliver on IBM-like profit growth, as Teavana and other recent acquisitions take center stage in the earnings outlook for the Seattle-based brewer. Recent earnings strength signals Starbucks is finding increasing success in growing profit margins.
Starbucks will also need to jolt growth at Teavana, after the company's same store sales growth slowed in recent quarters, putting shares well below their Aug. 2011 initial public offering price.
As with previous acquisitions, Starbucks indicated it intends to weave Teavana's products and merchandising into Starbucks existing stores, while also expanding the tea-makers branded retail outlets. CEO Schultz also indicated Teavana will be a strong complement to Starbucks Tazo tea brand.
"This complements our existing Tazo brand and gives us the unique opportunity to create a two-tiered market position," Schultz said, in a statement announcing the deal.
"Powered by Starbucks existing infrastructure, Starbucks plans to continue to grow and extend Teavana's already-successful 300 mall-based stores as well as add a high-profile neighborhood store concept that will accelerate Teavana's domestic and global footprint," the company added in a press release.
According to Starbucks calculations, Teavana is expected to add 1 cent to the company's fiscal 2013 earnings. Roughly 70% of Teavana's shareholders have approved the merger 'by written consent,' notes Starbucks of the deal, which it expects to close by year-end.
In Wednesday trading, Starbucks shares fell nearly 3% to $48.84, while Teavana's shares surged over 50% to $15.45, just below Starbucks cash offer.
In spite of Wednesday stock gains, Teavana shares are off nearly 20% in 2012, while Starbucks has gained over 6% year to-date.