Westrock Coffee to acquire North Carolina coffee and tea company in $405 million deal

by Roby Brock ([email protected]) 2,859 views 

Westrock Coffee Co., the Scott Ford startup, announced Friday (Jan. 31) it has entered into a definitive agreement to acquire North Carolina-based S&D Coffee & Tea from publicly-traded Cott Corp.

The $405 million transaction is expected to close in the first quarter of 2020 and will create an even larger integrated coffee company serving the needs of the retail, restaurant, convenience store, and hospitality industries.

“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,” said Westrock Coffee CEO Scott Ford, the former CEO of Alltel Corp. “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 added, “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.”

Westrock Coffee will remain based in Arkansas, with its recently enlarged roasting and packaging plant in North Little Rock already earmarked for further expansion, a news release announcing the acquisition said. Likewise, the S&D organization in Concord, N.C., will continue as a major center of operations with plans to continue expansion of these facilities.

The new company will employ approximately 1,700 people globally and can roast, grind, and package more than 220 million pounds of coffee annually.

Cott Corp. has been shedding assets as it transitions into a pure-play water solutions provider. It’s also been adding market share. In Oct. 2018, it acquired Hot Springs-based Mountain Valley Water Co. for $78.5 million.

When the transaction closes, Westrock will be one of the largest tea suppliers in the U.S. Ford announced that S&D President and CEO Ron Hinson will remain as an advisor to the new, combined organization as chairman emeritus.

“We value Ron’s extensive industry knowledge and deep relationships amassed over his 41 years at S&D. We admire how S&D has grown and evolved during his tenure as President and CEO,” Ford said.

BBH Capital Partners, a private equity strategy of Brown Brothers Harriman & Co., will provide acquisition capital alongside Westrock Coffee’s existing investors, including The Stephens Group, LLC.

BMO Capital Markets Corp. acted as exclusive financial advisor to Cott while Drinker Biddle & Reath LLP acted as legal advisor. Wachtell, Lipton, Rosen & Katz acted as legal advisor to Westrock Coffee.

Ford sat down for an extensive interview with Talk Business & Politics’ Roby Brock late last year to discuss the future of Westrock Coffee. Ford discussed his 10-year learning curve in the coffee business and how he hoped to reshape the global coffee supply chain. Read or listen to his full interview at this link.