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yesterday

Freeman Spogli’s $145 Million Deal to Acquire Philz Coffee Erases Employee Equity

Under the $145 million transaction, employee holdings will be extinguished without compensation in a process few companies pursue.

Philz Coffee, which was founded in San Francisco, will be sold to a private equity firm.
The original Philz Coffee location on 24th and Folsom streets on August 2, 2023. Photo by Yujie Zhou.

Overview

  • Los Angeles–based Freeman Spogli & Co. is set to complete its purchase of Philz Coffee by August 8 for $145 million
  • Current stockholders have until August 5 to request an appraisal before all common shares are canceled
  • All common stock and options will be canceled without consideration, rendering employee investments worthless
  • Board members and executives, including founders Phil and Jacob Jaber and CEO Mahesh Sadarangani, will receive deal-related payouts
  • The dissolution of common stock outside bankruptcy is rare and underscores tensions over equity and governance in private equity takeovers