Royal Cup deal takes Farmer Brothers private by June 30

Farmer Brothers Coffee Co. has agreed to be acquired by Royal Cup Coffee & Tea in an all-cash transaction valued at $1.29 per share. The deal, which would combine two national coffee and tea suppliers and take Farmer Brothers private, is expected to close during Farmer Brothers’ fiscal fourth quarter ending June 30.

Farmer Brothers’ board unanimously approved the agreement and will recommend that shareholders vote to approve the transaction, the company said in a statement. The deal is contingent on approval by a majority of Farmer Brothers shareholders and other customary conditions.

Farmers Brothers, a roaster, wholesaler and distributor of coffee, tea and allied products, serves the OCS channel in addition to its nationwide direct-store-delivery network. Its brands include Farmer Brothers, Boyd’s Coffee, SUM>ONE Coffee Roasters, West Coast Coffee, Cain’s and China Mist.

Royal Cup, a roaster and distributor of specialty and premium coffees, teas and beverages, also serves the OCS channel. In December, Braemont Capital invested in Royal Cup so the company could expand its roasting and distribution capabilities and “strengthen partnerships across the hospitality, foodservice, healthcare and convenience sectors.” Braemont Capital is also providing strategic capital to support the Farmers Brothers’ acquisition.

In a release, Royal Cup and Farmer Brothers said the combined company will create a “scaled, integrated beverage solutions platform” with a larger product portfolio, beverage equipment and services, and national distribution.

John Moore, Farmer Brothers’ president and CEO, says the acquisition will bring together more than 250 years of coffee expertise. “It allows us to enhance our manufacturing and production capabilities, expand our already industry-leading nationwide distribution network, create even greater economies of scale and ultimately better serve our customers.”