Two Century-Old Coffee Businesses Plan to Brew a Combined Platform

Royal Cup Coffee and Tea, a portfolio company of Braemont Capital since December 2025, has agreed to acquire Farmer Brothers Coffee at an equity valuation of approximately $28 million. Combined with $40 million of long-term net debt, the transaction yields an enterprise value of $68 million.

Royal Cup manufactures and distributes roasted coffee, packaged tea and beverage-related equipment and services used by restaurants, hotels, convenience stores, offices, healthcare facilities and specialty coffee retailers across the United States, Mexico and the Caribbean.

Specific products include Royal Cup branded roasted coffee beans used by restaurants and hotels, Royal Cup iced tea blends for foodservice operators, and portion-pack coffee for office coffee programs. The company also provides brewing equipment, filtration systems, and route-based delivery services that support beverage programs at customer locations.

Royal Cup was founded in 1896 by TJ Wilkinson and today is led by CEO Chip Wann. The Birmingham, Alabama-headquartered company has distribution and service locations across multiple U.S. states and some international markets, including Mexico and the Caribbean.

In FY 2025 ending in December, Farmer Brothers net sales were $342 million with a gross profit of $149 million (43% GPM) and adjusted EBITDA of just less than $15 million (4.3% EBITDA margin), which, based on the $68 million enterprise value, yields an EBITDA valuation multiple of 4.5x.

Farmer Brothers roasts, distributes, and services coffee, tea, and culinary products for foodservice and retail customers. The company also sells cappuccino mixes, spices, and baking or biscuit mixes used by restaurants and institutional foodservice operators. Company-owned brand names include Farmer Brothers, Boyd’s Coffee, SUM>ONE Coffee Roasters, West Coast Coffee, Cain’s, and China Mist.
The company also provides beverage planning services, brewing equipment installation and maintenance, and route-based distribution services to restaurants, convenience store chains, hotels, casinos, healthcare facilities, grocery retailers with private label coffee programs, and foodservice distributors.

Farmer Brothers was founded in 1912 by Roy Farmer and today is led by CEO John Moore. The company is headquartered northwest of Dallas in Northlake, Texas, and operates roasting, manufacturing, and distribution facilities across several U.S. states, including Texas and Oregon.

“This is a transformational and strategic step, which we believe materially strengthens our competitive position and advances our long-term growth strategy,” said Mr. Wann. “This transaction will allow Royal Cup and Farmer Brothers to combine our complementary capabilities and build a more resilient national organization with the infrastructure and products necessary to better support our growing customer base across multiple channels.”

According to Royal Cup, the acquisition of Farmer Brothers will expand its national footprint and strengthen its ability to deliver integrated beverage programs that combine roasting, route-based distribution, and equipment service.

“Farmer Brothers and Royal Cup have both been distinguished coffee distributors for more than a century,” said Mr. Moore. “By combining our tremendous expertise and operational excellence, we will be able to ultimately better serve our nationwide customer base through enhanced manufacturing and production capabilities, an unmatched distribution network and greater economies of scale.”

Braemont Capital acquired Royal Cup in December 2025. “We are excited to back Royal Cup in this important milestone and to partner with Farmer Brothers as they come together to build a stronger, more scaled platform,” said Wali Bacdayan, a partner at Braemont Capital. “The integration of their complementary roasting, route-based distribution and equipment services capabilities will create a more diversified and durable organization with the infrastructure to support customers nationwide.”

Braemont Capital makes control or minority investments of $25 million to $200 million of equity in North America-based companies operating in the insurance and financial services, commercial and infrastructure services, and tech-enabled business services sectors. The firm was founded in 2021 by Managing Partner Robert Covington and is headquartered in Dallas.

Stephens is the financial advisor to Royal Cup and Braemont Capital. North Point Mergers and Acquisitions is the financial advisor to Farmer Brothers.

The transaction is expected to close before the end of the second quarter of 2026.