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MONTVALE, N.J. -- The Great Atlantic & Pacific Tea Co. Inc. (A&P) today announced an agreement to sell its Eight O'Clock coffee division to Gryphon Investors, a San Francisco based private equity firm.
The company said it will realize cash proceeds of $107.5 million and receive a contingent Note for up to $20 million, the value and payment of which is based on certain elements of the future performance of the business. The completion of the transaction is subject to customary conditions and reviews, including the closing of the buyer's financing.
"This transaction will conclude our previously announced asset divestiture initiative to lower debt and reduce operating costs. This included the sales of our northern New England and Wisconsin operations earlier this year," said Christian Haub, chairman and CEO of A&P. "Upon completion of the Eight O'Clock coffee transaction, we will have realized total proceeds of approximately $285 million from the asset divestiture initiatives. Although difficult, these actions were necessary to the revitalization of our U.S. business and the company's long-term success."