Farmer Brothers to Be Acquired by Royal Cup, Creating a New National Coffee Platform

Key Points of the Acquisition

• Definitive Agreement Signed: Farmer Brothers Coffee Co. (NASDAQ: FARM) has entered into a definitive agreement to be acquired by Royal Cup Coffee & Tea. The deal values Farmer Brothers at \$1.29 per share in an all-cash transaction.
• Private Company Transition: Upon completion of the acquisition, Farmer Brothers will combine with Royal Cup and cease trading on the NASDAQ Global Select Market, becoming a privately held company.
• Timing: The transaction is expected to close in Farmer Brothers’ fiscal fourth quarter ending June 30, 2026, subject to shareholder approval and other customary conditions.
• Strategic Capital: Braemont Capital, which invested in Royal Cup in December 2025, is providing strategic capital to support the transaction.
• Comprehensive Platform: The combined business will create a scaled, integrated beverage solutions platform with an extensive product portfolio, beverage equipment and services, and national distribution capabilities.
• Brands and Customer Reach: Farmer Brothers’ brands include Farmer Brothers, Boyd’s Coffee, SUM>ONE Coffee Roasters, West Coast Coffee, Cain’s, and China Mist, serving a wide range of U.S.-based customers from small restaurants to large institutional buyers.
• Board Approval: The Farmer Brothers Board has unanimously approved the transaction and recommends shareholders vote in favor.

Details Investors and Shareholders Must Know

• Shareholder Vote Required: The transaction is contingent upon approval by a majority of Farmer Brothers’ shareholders.
• Proxy Statement: Farmer Brothers will file a proxy statement and other documents with the SEC. These will contain important information and will be mailed to shareholders. Investors are urged to read these documents carefully when available.
• Potential Price Sensitivity: The offer price of \$1.29 per share may be notable for shareholders, especially those considering the company’s historical trading range. The transition to a private entity implies shareholders will be cashed out at this price, and the shares will no longer be publicly traded.
• Risk Factors: The company notes several risks that could affect the transaction, including legal proceedings, competing acquisition proposals, the possibility of conditions not being met, disruption to business relationships, changes in operating costs, and general economic conditions. These could impact the timing or completion of the deal.
• Termination Fee: The merger agreement may require Farmer Brothers to pay a termination fee if the transaction is not completed under certain circumstances.
• Advisors: North Point Mergers and Acquisitions, Inc. is the financial advisor to Farmer Brothers, with Winston & Strawn LLP as legal advisor. Stephens, Inc. and Kirkland & Ellis LLP advise Royal Cup and Braemont Capital.
• Forward-Looking Statements: The company cautions that statements about the transaction are forward-looking and subject to risks and uncertainties. Investors should not place undue reliance on these statements.
• Contact Information: For investor and media inquiries, Farmer Brothers’ Director of Communications is Brandi Wessel (405-885-5176, [email protected]). Braemont Capital’s contacts are Dan Gagnier and Lindsay Barber ([email protected]).

Strategic Rationale and Market Impact

The merger will bring together two long-standing coffee industry leaders with a combined history of over 250 years. Management highlights expanded manufacturing and production capabilities, nationwide distribution, and greater economies of scale, all aimed at enhancing customer service across foodservice, hospitality, and convenience markets.

Royal Cup, a nearly 130-year-old family-owned business, has built a strong national presence in specialty and premium coffee and tea. Braemont Capital’s investment is expected to accelerate innovation and expansion. The unified platform will offer a “one-of-a-kind coffee, tea, and beverage provider,” according to Braemont Capital Partner Wali Bacdyan.

Risks and Uncertainties

• Completion risk: The deal may not close if conditions are not met.
• Legal proceedings: The merger may result in costs or liabilities.
• Disruption: Announcements and pending transactions may impact employee and partner relationships.
• Competing proposals: Other acquisition offers could emerge.
• Termination fee: Farmer Brothers may owe a fee if the merger is terminated under certain circumstances.
• General economic and industry-specific risks.

Next Steps for Shareholders

• Monitor SEC filings, including the proxy statement, for detailed information and instructions.
• Prepare to vote on the transaction when the proxy materials are distributed.
• Consider the offer price and implications of Farmer Brothers becoming a private entity.

Disclaimer

This article is for informational purposes only and does not constitute investment advice or a solicitation to buy or sell any securities. All forward-looking statements are subject to risks and uncertainties. Investors should review official company filings and consult with their financial advisors before making investment decisions.

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