BREA, Calif. - Reborn Coffee, Inc. (NASDAQ: REBN), a specialty coffee retailer, has announced its intention to acquire a 55% majority stake in Derin Lezzetler, an Istanbul-based producer of artisan snacks and frozen bakery goods. The transaction is part of Reborn Coffee's strategy to expand into the health-conscious food market and to increase its market presence in the US, Europe, Middle East, and Asia Pacific regions.
Derin Lezzetler, established in 2015, is known for its high-quality gluten-free and artisan snacks. The company boasts a strong distribution network, partnering with globally recognized brands, including Starbucks (NASDAQ:SBUX) and Costa Coffee, to distribute its products worldwide.
Farooq Arjomand, Chairman of Reborn Coffee, expressed that the acquisition aligns with the company's vision to enhance its product offerings and cater to the evolving needs of customers. The partnership is expected to accelerate Reborn Coffee's expansion in the US market, introducing artisan and health-focused products to American consumers.
The acquisition aims to leverage Derin Lezzetler’s established relationships to expand Reborn Coffee's global footprint. Kerim Sukan, founder of Derin Lezzetler, shared his enthusiasm for joining forces with Reborn Coffee, highlighting the potential for growth and continued innovation in delivering products to health-conscious consumers, especially in the US.
Reborn Coffee is committed to serving high-quality, specialty-roasted coffee and believes the acquisition will complement its focus on healthy and quality products. The strategic move is also intended to enhance the product line and maintain high standards of food safety.
The information in this article is based on a press release statement from Reborn Coffee, Inc.
InvestingPro Insights
As Reborn Coffee, Inc. (NASDAQ: REBN) makes a strategic move to acquire a majority stake in Derin Lezzetler, the financial health and market performance of the company come into focus. According to InvestingPro data, Reborn Coffee has seen a significant revenue growth of 83.74% in the last twelve months as of Q4 2023, which may signal a positive trend as the company seeks to expand its market presence.
InvestingPro Tips suggest that while Reborn Coffee operates with a significant debt burden and may have trouble making interest payments on debt, analysts are optimistic about the company's sales growth in the current year. The anticipation of sales growth aligns with Reborn Coffee's expansion efforts and could be a driving factor for the company's future performance. Furthermore, Reborn Coffee's gross profit margin stands at an impressive 68.69%, indicating a strong ability to control costs and maintain profitability on its products—a crucial aspect as it integrates Derin Lezzetler's artisan snacks into its offerings.
Investors should note that Reborn Coffee's stock has experienced a substantial return over the last week, with a price total return of 54.55%. This could reflect market optimism surrounding the acquisition news. However, with a Price / Book multiple of 5.75, the stock is trading at a relatively high valuation, which might raise concerns about the company's current stock price compared to its book value.
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