Unilever announced an agreement to acquire the TAZO® brand from Starbucks. TAZO® is a leading brand in the fast-growing specialty tea category.

Under the asset purchase agreement, Unilever will acquire the TAZO® brand and all related intellectual property, signature recipes and inventory for $384 million. The transaction represents a multiple of 10 times pro forma EBIT. TAZO® had sales of $112.5 million over the past year.

Founded in 1994, TAZO® has a strong position in Specialty Black, Green and Herbal teas, as well as liquid concentrates focused in the Chai Latte segment. The fast-growing specialty tea segment makes up 48% of the total $1.6 billion (FY 2016) at-home tea category and trends suggest it will become more prominent in the future. TAZO® is sold primarily in grocery, mass and convenience channels in the US and Canada, and is offered in formats including packaged teas, K-Cup® pods and bottled ready-to-drink teas.

“With its strong appeal to millennials, TAZO® is a perfect strategic fit for our US portfolio that includes exciting new brands such as Seventh Generation, Dollar Shave Club and Sir Kensington’s,” said Kees Kruythoff, President, Unilever North America. “TAZO®’s solid position in the fast-growing specialty tea segment, coupled with Unilever’s tea expertise, presents a fantastic growth opportunity.”

“TAZO® represents another strategic addition which strengthens our tea portfolio towards high growth segments. Its artfully crafted specialty teas perfectly complement our global tea business, which includes Lipton, Pure Leaf, PG Tips, T2 and our recent addition, Pukka,” said Kevin Havelock, President of Refreshment, Unilever.