by Tyler Hale
Westrock Coffee Company is growing its operation with the acquisition of a North Carolina coffee and tea company.
The Little Rock-based coffee company, founded by Scott Ford, has entered into an agreement to buy S&D Coffee & Tea from Cott Corporation for $405 million in an all-cash deal. The transaction is expected to close within the first quarter of 2020 pending regulatory review.
“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. 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. 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, Westrock Coffee Co-founder and Chief Executive Officer, said in a statement.
S&D Coffee &Tea, located in Concord, North Carolina,is a custom coffee roaster and blender of food service iced tea that was founded in 1927. The company employs roughly 1,700 individuals.
Both companies will continue to operate under their own brand names “for the foreseeable future,” according to a news release. Westrock will remain headquartered in North Little Rock, and the company reportedly plans to expand its recently enlarged roasting and packaging plant. The North Carolina facilities have also been earmarked for expansion.
“Our combined organization will seek to lead the industry with our sustainability program and to accelerate the development of a broadening array of innovative products,” Ford said.
S&D President and CEO Ron Hinson is expected to remain as an advisor for the new company. He will be the chairman emeritus for the combined organization.
“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. 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,” Hinson said.
Cott Corporation, a Canadian water, coffee, tea and filitration solutions company, acquired S&D in August 2016 for approximately $355 million. In 2016, S&D had estimated revenues of $550 million.
However, Cott Corporation has shifted its strategy toward becoming a pure-play water solutions provider. In early January, the company announced in its strategic planning process that it was considering a sale for S&D as it continued its pivot to focusing on water.
Cott has sold multiple companies, including its traditional Beverage manufacturing business in 2017 for $1.25 billion and its soft drink concentrate production facility and RCI International division for $50 million.
The company acquired Mountain Valley Spring Company, the Hot Springs-based spring and sparking water company, in 2018 for $78.5 million in cash.
Images courtesy of Westrock Coffee Company