Royal Cup Coffee & Tea has signed an agreement to acquire Farmer Brothers Coffee Co. (NASDAQ: FARM) for $1.29 per share in an all-cash transaction, combining two B2B coffee suppliers with nearly 250 years of combined industry experience.
The transaction is expected to close during Farmer Brothers’ fiscal fourth quarter ending June 30, pending approval from a majority of Farmer Brothers shareholders and other customary conditions.
As of Dec. 31, Farmer Brothers had 21,720,306 shares outstanding, placing the total transaction value at about $28 million at $1.29 per share. Upon closing, Farmer Brothers will be taken private and delisted from the NASDAQ Global Select Market.
Two companies, one combined platform
The deal brings together two organizations across foodservice, hospitality, health care, convenience stores, retail and private label markets, aligning roasting, distribution and equipment service operations within a broader national organization.
Farmer Brothers President and CEO John Moore framed the combination as a natural pairing.
“Farmer Brothers has always been dedicated to perfecting roasting techniques and sourcing practices to bring our customers the finest traditional, premium and specialty coffee,” Moore said.
“Bringing together more than 250 years of coffee expertise, it allows us to enhance our manufacturing and production capabilities, expand our already industry-leading nationwide distribution network, create even greater economies of scale and ultimately better serve our customers.”
Royal Cup CEO Chip Wann echoed that sentiment, pointing to the complementary nature of the two businesses.
“Farmer Brothers has built an extraordinary legacy over the last 114 years – one that mirrors our own commitment to quality, route distribution and service, and the relationships we build with every customer we serve,” Wann said. “Together, we will bring greater scale, deeper expertise and an unmatched portfolio of products to the foodservice, hospitality and convenience markets we both call home.”
Braemont Capital’s role
The transaction is backed by Braemont Capital, a Dallas-based investment firm that invested in Royal Cup in December specifically to accelerate expansion. Braemont Partner Wali Bacdayan said the firm sees the deal as a platform-building opportunity.
“We are committed to helping partners like Farmer Brothers and Royal Cup unlock their full potential as they strategically grow operations and expand their customer base,” Bacdayan said. “We look forward to helping two of the leading experts in direct store delivery coffee operations come together to create a truly one-of-a-kind coffee, tea and beverage provider.”
Farmer Brothers’ financial backdrop
The deal comes against a difficult financial period for the Fort Worth-based company. For the six months ended Dec. 31, 2025, Farmer Brothers reported $170.5 million in net sales, down from $175.1 million a year earlier, while net loss widened to $8.9 million from $4.8 million. In its most recent quarter, the company’s earnings per share came in at -$0.22, significantly below the projected -$0.06, with revenue of $88.9 million falling short of the anticipated $90.45 million.
What each side brings
Founded in 1912, Farmer Brothers operates a nationwide direct-store-delivery network serving customers from small independent restaurants and foodservice operators to large institutional buyers. Its brands include Farmer Brothers, Boyd’s Coffee, SUM>ONE Coffee Roasters, West Coast Coffee, Cain’s and China Mist.
Royal Cup has operated since 1896, distributing throughout the U.S., Mexico and the Caribbean, serving foodservice, hospitality, office and specialty coffee markets.
What’s Next
Farmer Brothers’ Board of Directors unanimously approved the transaction and is recommending shareholders vote in favor. North Point Mergers and Acquisitions and Winston & Strawn LLP are advising Farmer Brothers, while Stephens Inc. and Kirkland and Ellis LLP are advising Royal Cup and Braemont Capital.
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