Why Farmer Brothers (FARM) Shares Are Jumping Today - Treehouse Foods (NYSE:THS)

Treehouse Foods Inc THS inked a deal with Farmer Brothers Company FARM to acquire certain assets for around $100 million, subject to customary purchase price adjustments.
As per the deal, TreeHouse will buy FARM's Northlake, Texas, coffee facility and non-Direct Store Delivery coffee business. The transaction is expected to close in the next 60 days.
Farmer Brothers intends to use the proceeds to pay down outstanding debt associated with its asset-based lending (ABL) and retire its term loan.
Farmer Brothers CEO Deverl Maserang, said, "With a sole focus on DSD, we will be able to realize even greater internal efficiencies and cost savings, while also better serving our largest, most profitable customer base."
Following the sale of its Northlake, Texas facilities, Farmer Brothers expects its annual revenue will be approximately $350 million with vastly improved product margins.
The acquisition will boost THS' single-serve pod and ready-to-drink coffee businesses and enhance its end-to-end private-label coffee offerings.
FARM has been THS's supplier of bulk ground coffee for its single-serve pods and ready-to-drink beverages.
Following acquisition closure, THS plans to retain around 180 FARM employees at the facility.
As of March 31, 2023, THS held $14.63 million in cash and equivalents.
Price Action: FARM shares traded higher by 59% at $3.07 premarket on Wednesday.

Why Farmer Brothers Shares Are Jumping Today