American roaster Westrock Coffee Company has entered into a definitive agreement to acquire North Carolina-based S&D Coffee & Tea from the Cott Corporation for US$405 million.
Cott announced its intention to sell S&D in January 2020, so the company can transition fully into a pure-play water solutions provider.
“This strategic combination will create the nation’s premier coffee, tea, and extract supplier that is capable of serving the most complex and demanding customers across the country and around the world,” Westrock Coffee Co-founder and CEO Scott Ford says.
“We intend to use the scale of the new company to offer the most innovative beverage solutions with competitive pricing to our global clients while simultaneously providing a premium price to our farmer partners at origin.”
The companies will continue to serve customers under their respective brand names for the foreseeable future. Westrock Coffee will remain headquartered in Arkansas, with its recently enlarged roasting and packaging plant in North Little Rock already earmarked for further expansion. Likewise, the S&D organisation in Concord will continue as a major centre of operations with plans to continue expansion of these facilities.
“Our unmatched commitment to customer service, product quality, and our industry-leading sustainability and transparent sourcing practices will remain a cornerstone of our business,” Ford says.
“Our combined organisation will seek to lead the industry with our sustainability program and to accelerate the development of a broadening array of innovative products.”
The new company will employ approximately 1700 people globally and can roast, grind, and package more than 220 million pounds of coffee annually. The company will also continue to be one of the largest tea suppliers in the United States and the leading premium extract supplier to global foodservice and consumer product companies.
After 41 years with S&D, President and CEO Ron Hinson will remain as an advisor to the new, combined organisation as Chairman Emeritus.
“Participating in S&D’s growth and success during the past four decades has been incredible. We achieved industry leadership by innovating to serve our customers. We invested in job and career growth for employees and our community, and I look forward to working with Scott and the newly combined leadership team to see these achievements go even further,” Hinson says.
“The highly complementary product and customer focus S&D brings to Westrock Coffee makes this a terrific event for our business, our employees, and especially our customers.”
S&D has operated since 1927 and is a US market leader in custom coffee roasting and is the largest blender of iced teas for food service and convenience stores in the United States.
“The S&D team is known for its dedication, hard work, and passion for quality beverages and first-class service to its customers. That commitment is evident to anyone who visits S&D or works with them, and we are confident S&D will continue to thrive under its new ownership,” Cott CEO Tom Harrington says.
“The combination of the sale of S&D, along with the recent announcement of Cott’s acquisition of Primo Water Corporation, positions Cott to be a pure-play water solutions provider with financial metrics more in line with our water peers.”
The transaction is expected to close in the first quarter of 2020.