OAK BROOK, Ill. — TreeHouse Foods Inc. announced Wednesday that it has signed a definitive agreement with Farmer Brothers Company to acquire its Northlake, Texas, coffee facility and the Farmer Brothers non-Direct Store Delivery coffee business — referred to as Direct Ship — for approximately $100 million, subject to customary purchase price adjustments.
The facility, built in 2017, brings roasting, grinding, flavoring and blending capabilities to the TreeHouse Foods portfolio to complement the company's existing single-serve pod and ready-to-drink coffee businesses. The acquisition enables TreeHouse Foods to deliver greater category depth in a world-class, end-to-end private label coffee offering for its customers.
"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," said Steve Oakland, CEO and president of TreeHouse Foods. "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."
Farmer Brothers has historically been a bulk ground coffee supplier to TreeHouse Foods for its single-serve pods and ready-to-drink beverages. Following closing, the acquisition is expected to create greater profit capture in the supply chain. TreeHouse Foods will also assume select customer relationships and retain approximately 180 team members from Farmer Brothers to support operations at the facility.
The transaction is expected to close within the next 60 days.