Sara Lee Sells Foodservice DSD Coffee Business

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Sara Lee Sells Foodservice DSD Coffee Business

DOWNERS GROVE, Ill. -- Sara Lee Corp. will sell its U.S. direct-store delivery (DSD) foodservice coffee business to Farmer Bros. Co. The $45 million sale is expected to close in the first quarter of 2009, the company stated.

"We are pleased to announce the sale of our Foodservice DSD coffee business, which is consistent with our commitment to simplifying our business to focus on areas where we have a clear, sustainable point of difference and can leverage our scale," said CJ Fraleigh, chief operating officer for North America, Sara Lee Corp. "We remain committed to growing our foodservice beverage business, with its leading liquid and roast and ground coffee positions, through our strong national sales force and distributor network."

As part of the transaction, the Superior Coffee, Cain's, Ireland, Justin Lloyd, McGarvey, Metropolitan, Prebica, Suntipt in the U.S., Wechsler, Cafe Royal and Royal Kona brands will be sold to Farmer Bros., which will license them back to Sara Lee for a transition period.

In addition, Farmer Bros. will acquire more than 20,000 additional customers, as well as Sara Lee's foodservice DSD coffee business sales and distribution staff and infrastructure, which includes more than 60 "branch" facilities, a fleet of vehicles, a major coffee manufacturing plant in Houston, and a distribution and spice facility in Oklahoma City.

Finally, for the next three years, Farmer Bros. and Sara Lee entered into reciprocal co-pack arrangements for the supply of certain coffee and tea products.