Gourmet coffeehouse operator Caribou Coffee (CBOU: chart) plans to sell 5.4 million shares at $13-$15 each in the offering led by Merrill Lynch, according to the SEC filing.

The Minnesota-based company expects to raise about $67.9 million in the deal, assuming the shares are priced at the midpoint of the price range. The company went forward with its IPO plans on Tuesday by setting the terms for the offering.

In addition to the 5.36 million shares, the underwriters have the option to buy up to 803.6 thousand shares to cover excess demand, if any. Existing shareholders do not intend to sell their shares and will hold about 72% of the total 19.3 million outstanding units after the offering is complete.

Caribou announced its IPO plans in July, 2005 and intends to use $29.9 million to compensate all its debt outstanding under an open account facility and use the other $38 million for expansion and development by opening new stores.

Caribou Coffee offers gourmet coffee, espresso, tea, baked goods and branded merchandise. The company also sells to grocery stores, mass merchandisers, office coffee providers, airlines, hotels, colleges and entertainment sites.

Caribou Coffee has shown steady revenue growth. The company’s sales have grown at a compound annual rate of about 22.1% since 2002. Comparable store sales grew 3.2% in 2003, 8% in 2004 and 9% for the first six months of 2005. The company expects comparable store sales to increase 3% to 7% in the second half of the year 2005.

The company has been unfavorable for the past two years, and its loss for the first six months of year 2005 was $3.1 million, compared with a loss of $2 million for the same period for 2004.

Caribou is the second-largest chain of company-owned gourmet coffeehouses in the U.S., following Starbucks (SBUX: chart). In 2004, Starbucks' sales totaled $5.3 billion, 30% up from 2003, and net income totaled $391.8 million, up 46% from the year before.

As of July 31, Caribou had 337 coffeehouses in 14 states and the District of Columbia, 154 of them in Minnesota. Assuming a $14 offering price, Caribou's initial market capitalization would be about $270 million, compared with Starbucks' total market cap of more than $18 billion.

Three Minnesota-based companies have gone public so far this year: retailer Golf Galaxy Inc. (GGXY: chart), medical device maker ev3 Inc. (EVVV: chart) and voice and data services provider Eschelon Telecom Inc. (ESCH: chart). Ev3 is currently trading at $19 a share, 35% above its offer price, Golf Galaxy is up 14% to $16 a share, while Eschelon fell to $12 a share, 14% down from its offer price.

The Specialty Coffee Association of America says sector sales totaled $9.6 billion in 2004, up from $8.4 billion in 2002. The market is growing at about a 6.9% compound annual grown rate.

The number of coffee houses in the U.S. increased to about 18,600 in 2004 from 15,400 in 2002, or at about a 10% compound annual growth rate, according to the industry sources.