Wednesday April 16, 5:18 pm ET SEATTLE (AP)-- Starbucks Corp. is buying hometown rival Seattle Coffee Co. for $72 million in cash, the companies said Wednesday. The deal with Seattle Coffee's parent company, Atlanta-based AFC Enterprises, includes Seattle Coffee's subsidiaries -- Seattle's Best Coffee with 129 stores and Torrefazione Italia, with 21 stores. All are in the United States and Canada. The deal, expected to be complted with 90 days, also gives Starbucks access to Seattle Coffee's wholesale contracts with about 12,000 grocery stores and food service accounts that distribute the company's coffee beans. Starbucks already has distribution agreements with 18,000 grocery stores and 5,600 foodservice accounts. "Acquiring the (Seattle's Best Coffee) and (Torrefazione Italia) brands provides us an opportunity to launch the next phase of our specialty coffee growth," said Howard Schultz, Starbucks chairman. He said the two store groups being acquired offer specialty coffees that are distinct from what Starbucks offers. Starbucks has not said whether it plans to close any stores and declined to disclose future plans. Seattle's Best Coffee was founded in Seattle in 1970. Torrefazione Italia Coffee brand was introduced into the United States in 1986. Starbucks said it expects acquisition-related costs to cut fiscal 2003 earnings by about one cent a share, and adjusted its fiscal 2003 target to 66 cents to 67 cents a share. Shares of Starbucks closed Wednesday at $25.73 a share, down $1.01 on the Nasdaq Stock Market, where shares of AFC Enterprises were at $15.24 a share, up 52 cents.
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