Coffee roaster Farmer Brothers Co. (FARM) announced Wednesday it has entered into a definitive agreement to sell its direct ship business, including its Northlake, Texas facility to TreeHouse Foods, Inc. (THS) for approximately $100 million, subject to customary purchase price adjustments.
The company expects to use the proceeds from the sale to pay down outstanding debt associated with its asset-based lending (ABL) and retire its term loan.
The sale will increase Farmer Brothers' balance sheet flexibility and allow it to focus on execution, improving margins and driving strategic growth in the direct store delivery (DSD) and key account sales channels.
The sale is subject to customary closing conditions and is currently expected to close within the next 60 days. It will include the transition of approximately 180 Farmer Brothers team members to TreeHouse Foods as TreeHouse Foods moves to begin operations at the Northlake, Texas facility.
At closing, Farmer Brothers will transition the entirety of its DSD production operations to its Portland, Oregon roasting and production facility and will continue existing relationships with third-party roasters for additional capacity.
The company's corporate headquarters will remain in Northlake, Texas, where it will continue to lease office space at its current location.
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