TreeHouse to acquire Harris Tea for $205M

TreeHouse (THS) announced that it has signed a definitive agreement to acquire certain subsidiaries that operate the private brand tea business of Harris Freeman & Co. for approximately $205M, subject to customary purchase price adjustments. The acquisition includes Harris Tea’s manufacturing facilities in Moorestown, New Jersey and Marietta, Georgia, and TreeHouse Foods will welcome approximately 300 Harris Tea team members. The acquisition of Harris Tea will be accretive to the company’s overall growth and margins. The company has agreed to a purchase price that equals roughly 8.5x trailing-twelve-month adjusted EBITDA, or 6.5x net of synergies and the net present value of future tax benefits. This transaction is expected to close in the first quarter of 2025 and will be funded primarily with cash on hand, and fully satisfies the company’s obligation under its bond indenture to either reinvest certain proceeds from the previously completed Meal Preparation sale or retire debt. Upon closing, the company expects its leverage ratio1 to be within its target range of 3.0x to 3.5x. Finally, TreeHouse Foods is reiterating its 2024 full year guidance, including the expectation of sequential improvement in volume growth and profit margin in the fourth quarter.