United States-based coffee roaster and distributor Coffee Holding Co Inc announced on 30 September that it had entered into a definitive merger and share exchange agreement with private holding company Delta Corp Holdings Limited. The transaction will be conducted through a newly created holding structure, with Coffee Holdings and Delta each becoming wholly owned subsidiaries of Pubco, the name of the new holding company.
Upon closing of the transactions, which is expected in the first quarter of 2023, Pubco will trade on Nasdaq under the ticker symbol “DLOG”. Mudit Paliwal, Chief Executive Officer and Founder; Peter Shaerf, Non-Executive Chairman and Joseph Nelson, Chief Financial Officer, will continue to lead the merged company, while Andrew Gordon, the current President and Chief Executive Officer of Coffee Holding, will continue to lead Coffee Holding as a wholly-owned subsidiary of Pubco.
This transaction is a transformative next step for Coffee Holding. The Delta team has a successful track record building a global business, offering our shareholders a unique opportunity and potential for additional returns. I am confident that Coffee Holding’s employees, customers, and shareholders will enjoy the many potential benefits of this partnership.
Andrew Gordon, President and Chief Executive Officer, Coffee Holding
The agreement, which was unanimously approved by Coffee Holding’s board of directors and Delta’s board of directors, is subject to certain conditions, including, in particular, approval by Coffee Holding’s shareholders and approval of the listing of Pubco’s shares on the Nasdaq Stock Market, the companies said in a press release.
Coffee Holdings shareholders will receive one common share of Pubco for each common share of Coffee Holdings they own, and Delta shareholders will exchange their Delta shares for $625 million in common shares of Pubco, subject to certain adjustments, at an implied diluted value per share of $5.50. The Delta shareholders will become the majority shareholders of Pubco.
Delta is excited to reach an agreement with Coffee Holding for the proposed transaction, which I believe will provide substantial benefits to all stakeholders of Delta and Coffee Holding. Since our founding in 2019, Delta has experienced rapid growth in revenues and profitability and is now a leading global logistics provider to many of the world’s top natural resource, industrial and energy businesses. I am proud to say this has been achieved through our focus on customer service and innovation backed by a strong leadership team with decades of experience.
The transaction will enable us to accelerate [the] expansion of our business and enter new markets that have synergies with our core businesses. This includes a broadening of our energy transition, sustainability, and environmental stewardship-related service offerings.
Mudit Paliwal, Chief Executive Officer and Founder, Delta Corp
Delta has been able to capitalise on the global commodity revolution as a leading asset-light, third-party logistics provider. Our growth has historically come from market share capture and strategic, bolt-on acquisitions funded primarily through internally generated cash flows. This has kept our balance sheet strong and with no debt. We anticipate continuing this approach to growth in the years ahead while making strategic investments in new technologies to increase operational efficiency, reduce risk and/or enhance our decision making, enabling us to accelerate our growth into the future.
Peter Shaerf, Non-Executive Chairman of the Board of Directors, Delta Corp
