TreeHouse Foods has signed a definitive agreement with Farmers Brothers to acquire its Northlake, Texas, coffee facility and delivery coffee business.
According to TreeHouse Foods, the purchase will cost approximately $100 million, subject to customary purchase price adjustments.
Farmers Brothers Company operates in the US and is a coffee roaster, wholesaler, equipment servicer and distributor of coffee, tea and culinary products.
The US coffee roaster’s Northlake facility was built in 2017 and will bring roasting, grinding, flavouring and blending capabilities to the TreeHouse Foods portfolio, adding to the company’s existing single-serve pod and RTD coffee business.
TreeHouse Foods says that the acquisition will enable it to deliver greater depth within the private-label coffee category.
Steve Oakland, CEO and president of TreeHouse Foods, said: “The state-of-the-art Northlake facility strengthens TreeHouse Foods’ category depth in coffee as a focused, private label leader and is consistent with our strategy to pursue opportunities that drive category growth and deliver attractive financial returns”.
He continued: “As we continue to execute our long-term growth initiatives, we’re pleased to add new capabilities, particularly in roasting and grinding, which make us a more vertically integrated coffee manufacturer able to further penetrate this high growth, high margin category”.
Prior to the acquisition, Farmer Brothers has been a bulk ground coffee supplier to TreeHouse Foods for its single-serve pods and RTD beverages.
TreeHouse Foods will assume select customer relationships and retain around 180 team members from Farmer Brothers to support operations at the facility.
The transaction is expected to close within the next 60 days.
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