Peet's Coffee

Acquired · Jun 4

Starbucks (with Howard Schultz)

Starbucks was modeled on Peet's and first shipped its beans up under the Starbucks name. The original owners later bought Peet's with debt to equity above 6 to 1, which left them unable to take risks.

Tips

• Schultz avoided debt at Starbucks because the old Starbucks was cornered by a 6-to-1 debt load▶ 40:20The original owners sold the company for $3.8 million in 1987 after the Peet's deal strained their finances.