TreeHouse Foods and Farmers Brothers have officially entered into a definitive agreement, with TreeHouse Foods set to acquire Farmers Brothers’ Northlake, Texas coffee facility and delivery coffee business.
As per TreeHouse Foods, the acquisition is expected to entail a cost of approximately $100 million, which is subject to customary purchase price adjustments.
Operating within the United States, Farmers Brothers Company specializes in multiple facets of the coffee industry. This includes coffee roasting, wholesaling, equipment servicing, as well as the distribution of coffee, tea, and culinary products.
Farmers Brothers’ Northlake facility, established in 2017, will augment TreeHouse Foods’ portfolio by providing roasting, grinding, flavoring, and blending capabilities. This addition complements TreeHouse Foods’ existing single-serve pod and ready-to-drink (RTD) coffee business.
According to TreeHouse Foods, the acquisition will empower the company to enhance its offerings in the private-label coffee category by providing a broader range of options and expanding its depth in this market segment.
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”.
Before the acquisition, Farmer Brothers served as a supplier of bulk ground coffee to TreeHouse Foods for its single-serve pods and ready-to-drink (RTD) beverages.
As part of the agreement, TreeHouse Foods will take over specific customer relationships and retain approximately 180 team members from Farmer Brothers. These team members will continue to support the operations at the acquired facility.
The anticipated timeline for the completion of the transaction is within the next 60 days.