Two small companies joining forces might not normally attract much notice. But the Nov. 3 acquisition of Diedrich Coffee (DDRX) by Peet’s Coffee & Tea (PEET) combines two especially hot stocks at a time when the coffee industry is an investor favorite.
The $213-million buyout of Diedrich caps an extraordinary stock market run. The Irvine, Calif., company’s shares traded at 36¢ at the start of 2009 and have rocketed more than 70 times higher, ending with Peet’s cash-and-stock offer of $26 per share.