Why Farmer Brothers Shares Are Jumping Today
Portfolio Pulse from Lekha Gupta
Treehouse Foods (THS) has agreed to acquire certain assets from Farmer Brothers (FARM) for around $100 million, including FARM's Northlake, Texas coffee facility and non-Direct Store Delivery coffee business. The deal is expected to close in the next 60 days. FARM shares traded higher by 59% premarket on Wednesday.
June 07, 2023 | 1:27 pm
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POSITIVE IMPACT
Farmer Brothers' shares jumped after announcing the sale of certain assets to Treehouse Foods for $100 million. The deal is expected to improve FARM's product margins and annual revenue.
The sale of assets to Treehouse Foods will allow Farmer Brothers to pay down outstanding debt and retire its term loan. The company will focus on its Direct Store Delivery business, which is expected to result in greater internal efficiencies and cost savings. This positive news has led to a significant increase in FARM's share price.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
POSITIVE IMPACT
Treehouse Foods' acquisition of assets from Farmer Brothers for $100 million will boost its single-serve pod and ready-to-drink coffee businesses and enhance its end-to-end private-label coffee offerings.
The acquisition of Farmer Brothers' assets will strengthen Treehouse Foods' position in the coffee market by expanding its single-serve pod and ready-to-drink coffee businesses. This will also enhance its end-to-end private-label coffee offerings, making it a more attractive option for customers and potentially leading to increased revenues.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 100