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Activist-pressured Swiss food giant Nestle SA announced Thursday, Sept. 14, that it has acquired a majority stake in coffee chain Blue Bottle Coffee Inc.

The terms of the deal were not disclosed, but the Financial Times reported the deal was valued at more than $700 million. A Nestle spokeswoman declined to comment on the purchase price but said Nestle has bought a 68% stake in the business.

Blue Bottle will continue to operate as a standalone entity, with founder James Freeman remaining as chief product officer along with CEO Bryan Meehan. Management and employees will retain the remaining 32% stake.

Nestle said in a statement that Blue Bottle's store count is expected to hit 55 by the end of the year, nearly double the 29 stores at the end of 2016 and up from just five in 2012. It's also launched bean products and ready-to-drink beverages sold both online and in stores.

"This move underlines Nestle's focus on investing in high-growth categories and acting on consumer trends," Nestle CEO Mark Schneider said in the statement. In June, Schneider identified coffee as one of the four high-growth categories where Nestle would focus its capital spending, including a "disciplined" acquisition approach.

The Nestle spokeswoman said the buyer began talks with Blue Bottle at the beginning of the year as "part of our ongoing portfolio review."

In its 15-year history, Blue Bottle has raised about $121 million in venture capital financing, most recently through a $75 million Series C round led by Fidelity Investments LLC in 2015. Fidelity invested $21.1 million in the round, marking down the asset by 43% a few months later. Traditional tech investors including Index Ventures and True Ventures also backed the Oakland, Calif., company.

Pursuing a similar VC fundraising model is Philz Coffee, which raised $45 million from TPG Growth last year. Starbucks Corp. (SBUX) - Get Starbucks Corporation Report in 2012 spent $100 million on the owner of the VC-backed La Boulange chain, shuttering the brand three years later.

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Nestle is no stranger to coffee, controlling about a quarter of the world coffee business and half the world instant coffee business, according to Euromonitor data. It's new to the coffee shop segment, however.

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"Coffee shops capture a significantly higher value per cup and have a different business model," the Nestle spokeswoman wrote in an email. "While we were previously not meaningfully present in the commoditized roast and ground segment, this has changed with the third wave of coffee, where Blue Bottle was one of the pioneers targeting discerning consumers, especially millennials." (The first wave was the mass marketing of coffee in the U.S. and the second wave was marked by retailers that highlighted roasting and origin, namely Starbucks.)

Activist shareholder Third Point LLC on June 25 unveiled a 1.3% stake in Nestle, describing it as "a conglomerate with unrealized potential for margin improvement and innovation in its core businesses, an unoptimized balance sheet, a number of noncore assets and a recent history of meaningful underperformance versus peers."

Third Point's Dan Loeb chastised Nestle in a letter for failing to adapt to "changes in consumer tastes and shopping habits, as well as an influx of new competition from smaller, local brands."

Third Point's adviser on the Nestle investment, who also is investing alongside the hedge fund, is Jan Bennink, former CEO of baby food company Royal Numico NV. Bennink has significant experience in both coffee and M&A. After selling Numico to Danone SA for $17 billion in 2007, he served as chairman of Sara Lee Corp., which split in 2012 into a meat company, Hillshire Brands Co., and a coffee company, D.E. Master Blenders 1753 NV.

Investment group Joh. A. Benckiser GmbH, now known as JAB, acquired D.E. Master for $9.8 billion a year after the split, and in 2013 D.E. Master formed a joint venture with Mondelez International Inc.'s (MDLZ) - Get Mondelez International, Inc. Class A Report coffee business, Jacobs Douwe Egberts BV.

JAB's massive coffee portfolio includes Peet's Coffee & Tea Inc., Caribou Coffee Co.,  Keurig Green Mountain Inc., Einstein Noah Restaurant Group Inc. and Krispy Kreme Doughnuts Inc., along with hipster favorites Stumptown Coffee Roasters Inc. and Intelligentsia Coffee Inc.

The Nestle spokeswoman would not comment on Bennink or Third Point's involvement, if any, in the Blue Bottle acquisition.

Even before Third Point's investment, Nestle had begun to move toward healthier offerings to keep up with evolving consumer tastes. The company announced June 15 that it's exploring strategic options for its U.S. confectionery business, which Susquehanna Financial Group LLLP analyst Pablo Zuanic estimated could be valued at $1.3 billion. Schneider said on a July 27 analyst call that there was "significant interest" in the asset from both strategic and financial bidders and that his "clear priority is a straight sale of the business," which is on track to be completed by the end of the year.

Last week, Nestle's U.S. subsidiary acquired vegetarian food maker Sweet Earth Inc. for undisclosed terms.

Blue Bottle did not respond to requests for comment.

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