Coffee supplier Farmer Brothers is to acquire Boyd Coffee Company for an estimated total price of $58.6 million.
The purchase consists of up to $42 million in cash and 21,000 shares of a new series of preferred stock.
Boyd’s generated revenues of approximately $95 million and sold about 16 million pounds of green coffee between August 2016 and July 2017. Once fully integrated, Farmer Brothers expects the transaction to deliver between $13 and $16 million in annual incremental adjusted EBITDA.
Farmer Brothers hopes to improve operational efficiency by moving production associated with the acquired Boyd’s business into its existing facilities. The transition and integration of the Boyd’s business is expected to take place over the next 12 to 18 months.
CEO of Farmer Brothers Mike Keown believes the deal marks an ‘excellent strategic fit’ for Farmer Brothers.
“We expect this acquisition will strengthen our position in the marketplace, expand our distribution footprint, and generate significant synergies,” he said.
Farmer Brothers chairman of the board Randy Clark added: “We believe Farmer Brothers is in a strong position to benefit from ongoing coffee industry consolidation by executing accretive acquisitions.
“Coming off the successful acquisitions of China Mist and West Coast Coffee, the Boyd transaction is another opportunity to advance Farmer Brothers’ long-term growth plans. I congratulate company management for identifying this transaction in pursuit of long-term growth for our stockholders.”
Boyd’s Coffee was founded in Oregon in 1900 and provides a range of coffees for the foodservice sector.
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