In a significant development, Westrock Coffee Company has officially entered into definitive agreements with affiliates of HF Capital and the Herbert Hunt family. These agreements entail a combined equity investment of $75 million being made in the company.
Under these agreements, the aggregate equity investments will be executed by acquiring 7,500,000 shares of Westrock Coffee Company’s common stock at a rate of $10 per share. The completion of these transactions is anticipated to take place in August 2023, subject to the fulfillment of standard closing prerequisites.
Westrock Coffee also made a noteworthy announcement regarding their plans to inaugurate a state-of-the-art facility in Conway, Arkansas, USA. This significant endeavor is the outcome of a remarkable investment exceeding $300 million. Notably, the establishment of this new facility is anticipated to create 600 job opportunities within a span of five years, boasting an average annual salary of approximately $70,000.
The facility will employ cutting-edge machinery, including specialized robotics, to streamline the production and packaging of a diverse range of beverages. These beverages will include cold brew coffees, lattes, various teas, juice-based products, and single-serve coffee cups, all packaged in cans or bottles. Additionally, the site will feature a dedicated product development laboratory and a pilot plant certified by the US Food and Drug Administration (FDA). This setup will empower Westrock to invent, evaluate, and manufacture innovative beverage options.
Scott T Ford, CEO and Co-Founder of Westrock Coffee, stated, “We are excited to announce both a follow-on $50 million equity investment by HF Capital, one of the original investors in our go-public transaction and a $25 million equity investment by the Herbert Hunt family, a new investor who was excited for the opportunity to partner with our team as we expand our extract and ready-to-drink (RTD) capabilities.”
He further stated that the inclusion of equity investments and the amendment to the credit agreement are integral components of a capital plan enabling the company to finalize the construction of two additional can lines and the Conway facility.
The expansion of the extracts and RTD business in Conway is the gateway to future EBITDA expansion and remains Westrock Coffee’s top strategic priority and key enabler of future growth, he concluded.
Andrew Seamons, Chief Investment Officer at HF Capital, commented, “Our agreement to make this additional investment further validates our belief in Westrock Coffee’s strategy to capitalise on the strong demand for extracts and RTD as a growing consumer category and on the ability of the Westrock Coffee team to deliver on that strategy”.