Westrock Coffee plans to be a public company through a merger deal with Riverview Acquisition Corp.
April 13 - 2022
Coffee Geography Magazine
Westrock Coffee Company, a Leading Integrated Coffee, Tea, Flavors, Extracts, and Ingredients Solutions Provider, to Become a Public Company Through Business Combination with Riverview Acquisition Corp. - Westrock Coffee offers a highly scalable platform and is delivering strong financial results with estimated 2022 revenue of approximately $960 million and projected adjusted EBITDA of approximately $75 million - The transaction values Westrock Coffee at an enterprise value of approximately $1.086 billion at $10 per share and, assuming no redemptions by Riverview shareholders, will deliver approximately $500 million in gross cash proceeds to the combined company - The transaction includes $250 million in common stock PIPE commitments at $10 per share, including $60 million from R. Brad Martin, NFC Investments, LLC, and the other Riverview Acquisition Corp. founders, $25 million from Westrock Coffee founders, and $78 million each from HF Capital, the Haslam family investment office, and funds managed by Southeastern Asset Management. It’s existing shareholders are rolling 100% of their shares into the combined company - The coffee company has also secured a financing commitment from Wells Fargo for a $300 million Senior Secured Pro Rata Credit Facility including a $150 million term loan and a $150 million revolving loan commitment. The term loan will be fully funded at closing and the revolver is expected to be largely undrawn - Following the close of the transaction and the refinancing of Westrock Coffee’s debt, the Company will have a strong balance sheet with an expected net cash position of approximately $120 million, assuming no redemptions by Riverview shareholders - Founded on a mission to positively impact the coffee, tea, and extracts market from crop to cup, Westrock Coffee is leading the industry through sustainable sourcing, digitally traceable supply chain management, and the improvement of the lives of 1.5 million smallholder farmers around the world - A webcast of a conference call with Westrock Coffee and Riverview Acquisition Corp. leadership, as well as an associated investor presentation, is accessible at westrockcoffee.com/pages/investors The company is led by Chief Executive Officer and Co-Founder Scott Ford, previously President and CEO of Alltel Wireless. Riverview is led by its Chairman and CEO, R. Brad Martin, Retired Chairman and CEO of Saks Incorporated and current Board member of FedEx Corporation and Pilot Company.
Westrock Coffee sources from more than 1.5 million smallholder farmers in 35 countries worldwide. Its hands-on approach to working with its farmer partners has led to improved social, economic, and environmental standards for people around the world while expanding its offerings to its customers. It’s proprietary digital tracing technology stack gives its customers visibility into every step of the supply chain. As a result, the Company has grown exponentially since its founding, with total net revenues expected to exceed $960 million in 2022. This transaction will support Westrock Coffee’s mission to build and efficiently operate the preeminent integrated coffee, tea, flavors, extracts, and ingredients supply chain in the world. Proceeds from the transaction will be used to fuel the Company’s organic growth plans, including further expansion of its product and solution offerings and customer base, and the build-out of manufacturing facilities in the U.S., including the largest, roasting to ready-to-drink facility in the nation. Funds will also be used in the pursuit of strategic acquisitions, and the acceleration of growth in existing and international markets including Europe, Asia Pacific, and the Middle East. Scott Ford, CEO and Co-Founder of Westrock Coffee, stated: “The announcement today to go public via this transaction with Riverview represents a truly important milestone in Westrock Coffee’s journey. We started Westrock Coffee when we saw the need for coffee farmers in Rwanda to earn a living wage and realized that a new business model for the industry could enable this outcome while being self-sustaining and un-reliant on the vagaries of charity or consumer price premiums. Our mission to positively impact the coffee, tea, flavors, extracts, and ingredients market from crop to cup has proven to be both enormously successful and gratifying. Our scaled platform and comprehensive portfolio of beverage solutions has allowed us to deliver high-quality coffee, tea, and extracts products to the largest and most recognizable names in the world, while making a noticeable impact in the lives of our farmer partners, by empowering them economically to improve their lives and the lives of those in their communities.” Ford continued, “As we were considering entering the public market, we had the opportunity to meet Brad Martin, an accomplished executive whose big heart and experience with scaled operating platforms made him the ideal partner to help fulfill our global mission. This transaction, in partnership with Brad and the incredible team at Riverview Acquisition Corp., will catapult our efforts globally and open a pathway for public investors to participate in our important work.” R. Brad Martin, CEO of Riverview, commented: “When we launched Riverview Acquisition Corp., I stated that our objective was to find a merger partner in an attractive business with tangible growth prospects in which we could invest, a solid market position with competitive strengths, and an experienced, public company-ready management team that has demonstrated a commitment to maximizing value while operating with the highest level of integrity. I’m pleased that we are able to announce today that we have achieved that objective in our proposed merger with Westrock Coffee.” Martin continued, “I’ve long admired the Ford family, and because of my respect for them, I approached them about the possibility of partnering with Riverview. The intense customer, commercial, and mission focus of the Westrock team has built a terrific business over the last 13 years, and now the Company is poised for a very promising future. The Westrock management team will be the largest equity owners in our Company, and my fellow shareholders in Riverview Acquisition Corp. and my partners in the PIPE investment are delighted to become part of the Westrock family.” Westrock Coffee Investment Highlights - Purpose-driven mission delivers measurable and sustained impact. Westrock Coffee was founded on the belief that growth is an inevitable byproduct of investments in infrastructure, farmer development, supply chain, product innovation, and technological advancement when combined with exceptional personal service. This growth provides smallholder farmers and their families in developing countries the ability to advance their quality of life and economic well-being. - Proprietary, digitally traceable supply chain technology. Creation and management of a sustainable and digitally traceable supply chain from the original farmer transaction through the finished consumer packaged good is a cornerstone of Westrock Coffee’s differentiation. - Large and growing total addressable market of $318 billion. The global coffee and tea market provides significant opportunity, including a TAM of $37 billion in Westrock Coffee’s traditional core business. - Unparalleled customer value proposition. Leading brands choose Westrock Coffee because it is singularly positioned to meet their needs, while simultaneously driving a new standard for sustainably sourced products. Westrock Coffee provides a comprehensive product and service offering to its customers, including a full range of beverage concentrate and flavoring systems. In addition to great tasting, high quality beverage solutions, customers rely on Westrock Coffee for best-in-class product innovation, consumer insights, and customer service. - Tenured, flagship customers with global operations. Westrock Coffee serves the largest and most iconic brands across multiple industries – the average tenure for Westrock Coffee’s top 20 customers, including businesses the Company has acquired since founding, is almost 20 years. - Strong financial profile and growth trajectory. Westrock Coffee is a highly scalable platform that is gaining market share and delivering strong financial results – 2022 net revenue is estimated to grow to approximately $960 million, driving projected Adjusted EBITDA growth of approximately 60% to $75 million. Transaction Overview The transaction values the combined company at a pro forma enterprise value of approximately $1.086 billion at $10 per share, representing 1.1 times projected 2022 revenues and approximately 14.5 times projected 2022 Adjusted EBITDA. As part of the transaction, Westrock Coffee will convert into a corporation and all of Westrock Coffee’s existing shareholders will roll 100% of their shares into the new Company and, assuming no redemptions from Riverview shareholders, will hold approximately 53% of the shares of the combined company on closing. Assuming no redemptions from Riverview shareholders, the transaction will deliver approximately $500 million in gross cash proceeds to the combined company including $250 million in common stock PIPE commitments at $10 per share, funded by $60 million from R. Brad Martin, NFC Investments, LLC, and the other Riverview Acquisition Corp. founders, $25 million from Westrock Coffee founders, and $78 million each from HF Capital, the Haslam family investment office, and funds managed by Southeastern Asset Management. In connection with the transactions, Westrock Coffee has secured a financing commitment from Wells Fargo for a $300 million Senior Secured Pro Rata Credit Facility to be entered into at closing, which will be used to re-finance the Company’s existing debt and fund its expansion plans. The Boards of Directors of Westrock Coffee and Riverview have each unanimously approved this transaction. The transaction is subject to customary closing conditions, including approval of the shareholders of RVAC. The transaction is expected to close by the end of the third quarter of 2022. Additional information about the proposed transaction, including a copy of the transaction agreement and investor presentation, will be provided in a Current Report on Form 8-K to be filed by RVAC with the Securities and Exchange Commission (“SEC”) and will be available on the Riverview website at www.riverviewacquisition.com, the Westrock Coffee website at www.westrockcoffee.com/pages/investors and at the SEC’s website at http://www.sec.gov/. Advisors Stifel is serving as Lead Financial Advisor and Wells Fargo Securities, LLC is serving as Financial Advisor to Westrock Coffee. Stifel and Wells Fargo Securities, LLC are both serving as Capital Market Advisors to Westrock Coffee. Wachtell, Lipton, Rosen & Katz is acting as legal counsel to Westrock Coffee. Stephens Inc. is serving as Financial and Capital Markets Advisor, and Cantor Fitzgerald & Co. is serving as Capital Markets Advisor to Riverview. King & Spalding LLP is acting as legal counsel to Riverview. Investor Conference Call Information Westrock Coffee and Riverview leadership will host a joint investor conference call to discuss the proposed transaction today, April 4th, 2022, at 7:30 AM ET. The conference call, as well as an associated investor presentation, can be accessed here, or on the Westrock Coffee investor relations website at www.westrockcoffee.com/pages/investors. Interested parties may also listen to the prepared remarks via telephone by dialing 1-844-512-2921, or for international callers, 1-412-317-6671 and entering pin number: 13728507. The telephone replay of the call will be available until Monday, April 11, 2022 at 11:59 PM ET, and a replay of the webcast will be archived on the investor relations website. About Riverview Acquisition Corporation Riverview Acquisition Corp. is a blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. Management is led by Chief Executive Officer R. Brad Martin, President Charles K. Slatery, and Chief Financial Officer Will Thompson.