OAK BROOK, ILL. — TreeHouse Foods, Inc. has reached an agreement to acquire the Farmer Brothers non-direct store delivery coffee business as well as its Northlake, Texas, coffee facility for approximately $100 million. TreeHouse also said it will assume select customer relationships and retain approximately 180 Farmer Brothers employees to support operations at the Northlake plant.

Built in 2017, the Northlake facility offers roasting, grinding, flavoring and blending capabilities, which TreeHouse said complement its existing single-serve pod and ready-to-drink coffee businesses.

“The state-of-the-art Northlake facility strengthens TreeHouse Foods’ category depth in coffee as a focused, private label leader and is consistent with our strategy to pursue opportunities that drive category growth and deliver attractive financial returns,” said Steven T. Oakland, president and chief executive officer of TreeHouse Foods. “As we continue to execute our long-term growth initiatives, we’re pleased to add new capabilities, particularly in roasting and grinding, which make us a more vertically integrated coffee manufacturer able to further penetrate this high growth, high margin category.”

Founded in 1912, Farmer Brothers has supplied bulk ground coffee to TreeHouse for its single-serve pods and ready-to-drink beverages. In addition to coffee, Farmer Brothers offers hot and iced teas, cappuccino mixes, spices and baking/biscuit mixes. Its primary brands include Farmer Brothers, Artisan Collection by Farmer Brother, Superior, Metropolitan, China Mist and Boyd’s.

Farmer Brothers said it plans to use proceeds from the sale to pay down outstanding debt associated with its asset-based lending and retire its term loan. The sale also is expected to give the company more flexibility and allow it to focus on execution, improving margins and driving strategic growth in the direct-store delivery and key account sales channels.

“Exiting the direct ship space will allow us to focus almost exclusively on DSD, which is our most profitable and highest growth potential business, while also assuring our valued direct ship customers are well-served by a national leader,” said Deverl Maserang, president and CEO of Farmer Brothers. “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.”

Farmer Brothers said it will transition all of its DSD production to its Portland, Ore., roasting and production facility and will continue existing relationships with third-party roasters for additional capacity.