“9:14a ET 9/30/2022 - Dow Jones
Coffee Holding to Merge with Bulk Logistics Provider
By Dean Seal
Coffee Holding Co. has signed an agreement with the privately held logistics firm Delta Corp Holdings Ltd. to merge into a single entity that will operate under the name Pubco.
The wholesale coffee roaster and dealer said Friday that under the terms of the deal, its shareholders will receive one share of the new company for each Coffee Holding share they own, while Delta stockholders will exchange their shares for $625 million in ordinary shares of the new company, at an implied share price of $5.50.
Pubco will have an implied enterprise value of about $655 million, with Delta shareholders collectively owning about 95% of the outstanding shares and Coffee Holdings shareholders owning the rest.
Trading in shares of Coffee Holdings, which closed at $2.42 on Thursday, was halted when the news was released. After premarket trading resumed at 9 a.m. ET, shares shot up as high as 30%, sank to a loss minutes later and continued to fluctuate before market open. They are down more than 44% this year.
The transaction is expected to close in early 2023, pending approval from Coffee Holding shareholders, and that Pubco is slated to trade under the ticker symbol DLOG on the Nasdaq.
Pubco will be engaged in Bulk & Energy logistics, fuel supply, asset management-related services and commodities, including coffee, with a multinational footprint.
The combined company will be led by Delta's existing management team, while Coffee Holding will operate as a subsidiary of Delta and be led by its current president and chief executive, Andrew Gordon, who called the transaction a "transformative next step" for the company.
Delta Chief Executive Mudit Paliwal said the merger will allow the company to expand its business and enter new markets, while broadening its "energy transition, sustainability and environmental stewardship related service offerings."
Write to Dean Seal at dean.seal@wsj.com
(END) Dow Jones Newswires
September 30, 2022 09:14 ET (13:14 GMT)
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