Texas coffee roaster Farmer Bros. Co. has entered into an agreement to acquire all the assets of Portland-based Boyd Coffee Company with a combination of cash and stock in a deal worth US$58.6 million. The deal involves US$42 million in cash, plus 21,000 shares of a new preferred stock valued at around US$16.6 million, equating to approximately US$58.6 million.
Having been in business for more than a century, Boyd’s generated revenue of approximately US$95 million and processed and sold about 16 million pounds of green coffee during the previous twelve-month period.
Its coffee sales accounted for approximately 65 percent of revenue with the remainder of revenue primarily coming from other beverages and accessories.
Farmer Brothers expects to improve overall operational efficiency by moving the production volume associated with the acquired Boyd’s business into its existing production facilities.
The transition and integration of Boyd’s business are expected to take place over the next 12 to 18 months.
“We believe Boyd’s business will be an excellent strategic fit for Farmer Brothers,” says Mike Keown, Chief Executive Officer of Farmer Brothers. “We expect this acquisition will strengthen our position in the marketplace, expand our distribution footprint, and generate significant synergies.”
“We are confident Farmer Brothers is the right company to take Boyd’s brand to the next level,” says Jeffrey Newman, Chief Executive Officer at Boyd’s. “We look forward to a smooth transition and providing the same high-quality customer service that has been a hallmark of the Boyd Coffee Company for over 100 years.”
Farmers Brothers’ previous experience in major acquisitions includes its 2007 purchase of Coffee Bean International (CBI), West Coast Coffee and tea company China Mist.
Earlier this year, Farmer Brothers moved its headquarters from its long-term Californian base to Dallas.
“We believe Farmer Brothers is in a strong position to benefit from ongoing coffee industry consolidation by executing accretive acquisitions,” adds Randy Clark, Chairman of the Board at Farmer Brothers.
“Coming from 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.”
A company announcement confirms that as of the signing date, the preliminary estimated value of the Preferred Stock is US$16.6 million or US$789 per share, leading to an estimated value of the aggregate purchase price of US$58.6 million.
Boyd’s generated revenues of approximately US$95 million during the period from August 1, 2016, through July 31, 2017. Once fully integrated, Farmer Brothers currently expects the transaction to deliver between US$13 million to US$16 million in annual incremental adjusted EBITDA.
One-time costs associated with the transaction, including professional fees, integration expenses and employee-related fees are expected to be approximately US$9 million to US$11 million, and capital expenditures are expected to be approximately US$8 million to US$11 million through completion of integration, which is expected to be completed in approximately 12 to 18 months.
The transaction is expected to close in the fourth quarter of calendar 2017 (which is the second quarter of fiscal 2018 for Farmer Brothers), subject to certain closing conditions.
Source: Food Ingredients First
Consumer healthcare firm Haleon has appointed Tate & Lyle executive Dawn Allen as its new chief financial officer, effective 1 November 2024. Allen will succeed Tobias Hestler, who has decided to step down from the role, citing a long-term health condition, the company said.
The group said that the bottling line, which adds 6,500 square metres to the existing 60,700-square-metre site, is the next necessary stage in the company’s international development. The leading brand in Campari Group’s global sales, demand for the Italian bitter apéritif has grown by 500% in the last decade.
The partnership will see Coca-Cola adopt new technology to foster innovation and productivity globally. Through the deal, Coca-Cola has made a $1.1 billion commitment to the Microsoft Cloud and its generative AI capabilities.
