Green Mountain buys Canadian coffee maker, ups outlook

(Reuters) - Green Mountain Coffee Roasters Inc acquired the wholesale business of Timothy's Coffees from an affiliate of private equity firm Sun Capital Partners for $157 million in cash to enter the Canadian market, and raised its first-quarter outlook.

Shares of the company, which sells the single-cup Keurig brewers and their accompanying K-Cup refills, jumped 2 percent to $69.66 in trading before the bell Friday on Nasdaq.

The acquisition, which is expected to add to Green Mountain's earnings per share in fiscal 2010, includes Timothy's World Coffee brand, the company said in a statement. Timothy's has been licensing K-Cup refills since 2000.

"This acquisition will provide Green Mountain with a Canadian presence and a coffee roasting facility in Toronto," Chief Executive Lawrence Blanford said.

Blanford said the retail part of Timothy's business will continue to be operated by Bruegger's Enterprises, affiliate of Sun Capital Partners, and the deal includes a five-year coffee supply agreement with Bruegger's Canadian affiliate.

Green Mountain also raised its first-quarter and full-year outlook.

(Reporting by Mihir Dalal in Bangalore )