JAB Holding, the closely held investment firm that’s building a coffee and soft drinks empire, has tapped a simple formula to help it grow: buy now and pay later. Much later.
With Monday’s purchase of Dr. Pepper Snapple Group, the investment firm behind the world’s No. 2 coffee company has made some $58 billion of acquisitions in the past six years. One secret to its success concerns its coffee suppliers, who agree to be paid as many as 300 days after selling the beans.
The lengthening payment terms are unprecedented in the commodities industry, where money in many cases still changes hands shortly after the goods are received.