Shares in the company, which also owns the Jacobs, Douwe Egberts and L’OR brands, surged as much as 18% above the offer price of €31.50 ($35), trading at around €37 ($41) by lunchtime in the Dutch capital.
The IPO is a big bet that coffee is recession-proof. The company makes most of its revenue from coffee consumed at home, a segment of the market that has grown during the coronavirus pandemic, with millions of people staying away from offices and cafes.
“We are thrilled to price this offer on Euronext Amsterdam during this extraordinary time,” CEO Casey Keller said in a statement. “Seeing the investor interest in JDE Peet’s reinforces the belief in our strategy and solidifies our role as a global leader in coffee and tea,” he added.
The JDE Peet’s IPO is the second-largest of the year world-wide. Beijing-Shanghai High-Speed Railway Corp. raised $4.4 billion on the Shanghai Stock Exchange in January, Dealogic data shows.
JDE Peet’s is betting on continued strong demand for hot drinks, a market that has boasted blockbuster deals in recent years. “The coffee and tea categories have benefited in the past from attractive growth fundamentals and have proven to be resilient in times of economic downturn,” the company, which bills itself as the world’s largest pure-play coffee and tea group, said.
JDE Peet’s said it intends to focus on increasing its household penetration in the United States, driving growth in emerging markets, expanding its retail coffee stores business in China and capturing attractive out-of-home opportunities. It sells coffee and tea in more than 140 countries and had revenue of €6.9 billion ($7.5 billion) in 2019.