Cott Corporation divests S&D Coffee & Tea business for US$405m

USA – Cott Corporation has agreed to sell its S&D Coffee and Tea business to Westrock Coffee Company for US$405 million on a debt free and cash free basis, subject to a customary working capital adjustment.

This follows an earlier announcement by the company that it was evaluating certain strategic alternatives for S&D Coffee and Tea, including a sale of the segment to enable the company transition into a pure-play water solutions provider.

The divestment is expected to close in the first quarter of 2020, subject to certain customary closing conditions including regulatory approval.

Established in 1927, Cott’s S&D business is a US market leader in custom coffee roasting and the one of the largest blender of iced teas for food service and convenience stores in the United States.

The division is also a leader in the high growth category of extracts and ingredients. 

Commenting on the acquisition, Scott Ford, Westrock Coffee Co-founder and CEO said: “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.

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“Our unmatched commitment to customer service, product quality, and our industry-leading sustainability and transparent sourcing practices will remain a cornerstone of our business,”

“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.”

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

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The companies will continue to serve customers under their respective brand names for the foreseeable future. S&D President and CEO Ron Hinson will remain as an advisor to the new, combined organization as Chairman Emeritus.

Post-acquisition, Westrock Coffee will retain its headquarters in Arkansas while S&D organization in Concord will continue as a major center of operations with plans to continue expansion of these facilities.

Tom Harrington, Cott’s CEO commented: “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.” 

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