TreeHouse Foods, Inc. has announced a major move. The company will acquire Harris Tea, a leading private-brand tea manufacturer, for $205 million. This deal, expected to close in early 2025, boosts TreeHouse’s growth in the private-brand tea market and strengthens its market position.
What’s in the Deal?
TreeHouse Foods is buying Harris Tea’s two manufacturing facilities in Moorestown, New Jersey, and Marietta, Georgia. Along with the factories, around 300 Harris Tea employees will join TreeHouse. The acquisition also brings unique tea blending and sourcing capabilities, giving TreeHouse a competitive edge in the growing tea category.
Steve Oakland, CEO of TreeHouse Foods, called the deal a perfect fit. “This acquisition builds on our leadership in the tea category and strengthens our long-term strategy in high-growth, high-margin areas,” he said.
A Win for Growth
Harris Tea’s leadership team is optimistic about the deal. Kevin Shah, Co-CEO of Harris Freeman, sees this as a natural partnership. “TreeHouse Foods brings scale, expertise, and strong customer relationships. We’re confident this move will accelerate our growth,” Shah said.
The private brand tea market in the U.S. has seen steady growth. By acquiring Harris Tea, TreeHouse aims to expand its vertical integration, improve profit margins, and offer even better service to its customers.
Financial Details
The purchase price of $205 million equals about 8.5 times Harris Tea’s adjusted earnings for the past 12 months. TreeHouse expects the deal to improve its financial performance, with synergies reducing costs and boosting margins over time. The company will fund the acquisition with cash on hand, keeping its leverage ratio within its target range of 3.0x to 3.5x.
TreeHouse has also confirmed that this transaction meets its obligations from the sale of its Meal Preparation business. The company continues to focus on strategic growth areas, maintaining its full-year financial guidance for 2024.
What’s Next for TreeHouse?
With this acquisition, TreeHouse is doubling down on the tea market. The company plans to integrate Harris Tea’s expertise into its operations and expand its reach. The tea category, according to Oakland, presents “significant opportunities for future growth.”
The deal is just one part of TreeHouse’s broader strategy. As a leader in private brands, the company remains focused on snacking and beverages, promising long-term growth for its customers and shareholders.
About TreeHouse Foods
TreeHouse Foods is a major player in private brands across North America. The company is known for its focus on customer satisfaction, delivering snacks and beverages that delight. TreeHouse continues to invest in operational efficiencies and category expertise to drive profitable growth.
