S&D Coffee, the largest foodservice supplier of tea and coffee in the U.S., was acquired last week for $355 million by Cott Corp., a Canadian beverage company located in Tampa, Fla.
Cott is a $3.3 billion conglomerate with 12,500 workers in 21 countries manufacturing a range of beverage products including recently acquired Eden Springs water and private-label carbonated beverages.
The 89-year-old S&D is based in Concord, N.C., where it employs 1,500 and operates three coffee roasting and tea blending facilities. The company expects to earn $550 million in 2016.
S&D Coffee supplies coffee and tea for brewing at thousands of McDonald’s as well as Krispy Kreme and Dunkin’ Donuts outlets. Its clients include restaurant, convenience, gas station, hospitality and private-label retailers.
“The synergies S&D has with Cott, whether technology, supply chain, product, distribution channels or markets, are abundantly clear,” writes CEO Ron Hinson in a release announcing the sale. S&D will roast and grind the beans to supply Cott’s DS Services unit, said Jerry Fowden, Cott’s CEO.
“Every time you wander into a restaurant these days, there’s a new flavor of some iced, frozen beverage, many of which are in the coffee space,” Fowden said. “S&D is a leading extract and ingredient supplier behind that trend,” Fowden told the Tampa Bay Business Journal.
S&D will operate as a subsidiary retaining its name and management team.
Fowden said the addition of S&D “brings our Better for You beverage platform to over 65% of our adjusted EBITDA on a pro-forma basis with carbonated soft drinks representing just 12% of adjusted EBITDA. After closing the S&D acquisition, we will have a leading position in the coffee and tea foodservice industry in North America, which is an excellent complement to our leading HOD water, office coffee and filtration business,” according to Food & Beverage.