FARMER BROTHERS CO (FARM): M&A transaction — Farmer Bros. completes $100M sale of direct ship business to TreeHouse Foods; pays off $47M term loan

The Fourth Amendment includes a consent to the Sale (defined below) by the administrative agent and the lenders and amends certain terms and conditions of the Credit Agreement by, among other things: (i) reflecting the payoff in full, with proceeds from the Sale, of the $47.0 million term loan facility, (ii) reflecting the paydown, with proceeds from the Sale, of the revolving credit facility (and a reduction of the maximum commitment of the lenders under the revolving credit facility to $75.0 million), (iii) releasing liens of the administrative agent securing the obligations under the Credit Agreement on assets sold pursuant to the Sale, and (iv) amending the Credit Agreement so that the Company's financial covenant (i.e., fixed charge coverage ratio) is only in effect during such times when the Company's liquidity falls below certain thresholds.

Christopher P. Mottern informed the Company’s board of directors (the “Board”) of his resignation from the Board effective as of 5:00 p.m. (Central Time) on June 30, 2023.

On June 30, 2023, the Board elected Alfred Poe, a member of the Board since 2020, as Chairman of the Board effective following Mr. Mottern’s resignation.

On June 30, 2023, the Board appointed each of John Moore and Tom Bauer as executive officers of the Company. Mr. Bauer remains Vice President, Head of DSD.

On June 30, 2023, the Company completed its previously announced sale of certain assets of the Company related to its direct ship and private label business, including the Company’s production facility and corporate office building in Northlake, Texas (the “Sale”) pursuant to that certain Asset Purchase Agreement, dated as of June 6, 2023 (the “Original Agreement” and as amended by that certain Amendment, dated as of June 30, 2023 (the “Amendment”), the “Purchase Agreement”) by and between the Company and TreeHouse Foods, Inc., a Delaware corporation (“Buyer”) for a purchase price of $100 million in cash, subject to customary working capital and certain other adjustments

On June 30, 2023, Farmer Bros. Co., a Delaware corporation (the “Company”) and certain of its subsidiaries entered into that certain Consent and Amendment No. 4 to Credit Agreement (the “Fourth Amendment”), with the lenders party thereto, and Wells Fargo Bank, National Association, as administrative agent for each member of the lender group.