Coffee Holding Co., Inc. (Nasdaq: JVA) (“Coffee
Holding”), a publicly traded integrated wholesale coffee
roaster and dealer located in the United States, and
Delta
Corp Holdings Limited (“Delta”), a privately held holding
company for global businesses engaged in Bulk & Energy
logistics, fuel supply, commodities, and asset management,
announced today that the companies have entered into a definitive
merger and share exchange agreement, whereby Coffee Holding and
Delta will each become wholly owned subsidiaries of a newly created
holding company incorporated under the laws of the Cayman Islands,
Delta Corp Holdings Limited (“Pubco”). The closing of the
transactions contemplated by the definitive agreement is subject to
certain conditions, including, without limitation, the approval of
the shareholders of Coffee Holding and the approval of the listing
of the shares of Pubco on the Nasdaq Stock Market (“Nasdaq”). Delta
shareholders will become the majority shareholders of Pubco as
further detailed below.
Following closing of the transactions, which the
parties expect will occur in the first quarter of 2023, the
combined company will continue under Pubco, and expects to trade on
Nasdaq under the ticker symbol “DLOG”. The combined company will
continue to operate under the Delta management team led by Mudit
Paliwal, Chief Executive Officer and Founder; Peter Shaerf,
Non-Executive Chairman; and Joseph Nelson, Chief Financial Officer,
while Coffee Holding, as a wholly owned subsidiary of Pubco, will
continue to be operated under the leadership of Andrew Gordon,
currently Coffee Holding’s President and Chief Executive
Officer.
Andrew Gordon, President and Chief Executive
Officer of Coffee Holding, stated, “This transaction is a
transformative next step for Coffee Holding. The Delta team has a
successful track record building 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.”
Delta’s Chief Executive Officer and Founder
Mudit Paliwal stated, “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
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.”
Peter Shaerf, Delta’s Non-Executive Chairman of
the Board of Directors, stated, “Delta has been able to capitalize
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.”
Delta – a Fast-Growing, Asset-Light
Third-Party Logistics Company
Delta is a fully-integrated, global business
engaged in logistics, fuel supply and asset management related
services, primarily servicing the international supply chains of
commodity, energy, and capital goods producers. Delta has been in
operation since 2019 and its businesses facilitate the global trade
of energy, raw materials, intermediate goods, and agricultural
products. Delta is a multinational business with over 80 personnel
and has a global footprint through a network of offices in ten
countries throughout Europe, the Middle East and Asia.
Delta’s business is asset-light, and it relies
on its people, technology, customer relationships and
differentiated service offerings to drive its business and its
growth. Delta believes its asset-light business model
differentiates it from competitors and leads to greater
profitability while reducing risk. Delta has leadership positions
in niche markets where it has a unique competitive advantage which
allows it to leverage its broad portfolio of service offerings to
reduce its customers’ logistics costs while enhancing its
profitability.
Delta operates its business through three
segments: Bulk Logistics, Energy Logistics and Asset Management.
Each segment is headed by proven management teams which share a
commitment to the value of client focus and a vision of setting a
new standard of excellence within the sectors in which Delta
operates. Delta seeks high-growth niche opportunities within its
core business offerings or adjacent industries and leverages its
diverse service offering to penetrate its markets.
Key Transaction Terms
The transaction will be effectuated through a
newly created holding company structure, whereby Coffee Holdings
and Delta will each become wholly-owned subsidiaries of Pubco.
Under the agreement, shareholders of Coffee Holdings will receive 1
ordinary share of Pubco for each share of Coffee Holdings common
stock they own and Delta shareholders will exchange their shares of
Delta for $625 million in ordinary shares of Pubco, subject to
certain adjustments, at an implied diluted value per share of
$5.50. Immediately following the closing of the transaction, the
shareholders of Delta are anticipated to collectively own
approximately 95.21% of the outstanding ordinary shares of Pubco
and Coffee Holding shareholders immediately prior to the closing of
the transaction are anticipated to collectively own approximately
4.79% of the outstanding ordinary shares of Pubco on a diluted
basis, which ownership percentages may be subject to certain
adjustments.
The transaction also includes an earnout to
existing shareholders of Delta, which, if earned, consists of $50
million of additional ordinary shares of Pubco, which would be
issued to Delta shareholders if Pubco achieves $70 million or
greater of net income for the fiscal year ending 2023.
The agreement contains customary
representations, warranties and covenants made by Coffee Holding
and Delta, including covenants relating to both parties using their
commercially reasonably efforts to cause the transactions
contemplated by the agreement to be satisfied, covenants regarding
obtaining the requisite approval of Coffee Holding’s shareholders,
covenants regarding indemnification of directors and officers, and
covenants regarding Coffee Holding’s and Delta’s conduct of their
respective businesses between the date of signing of the agreement
and the closing. The agreement also contains certain termination
rights for both Coffee Holding and Delta, and, in connection with
the termination of the agreement under specified circumstances,
Coffee Holding and Delta may be required to pay the other party a
termination fee.
The agreement has been unanimously approved by
the Board of Directors of Coffee Holding and by the Board of
Directors of Delta. The Coffee Holding Board of Directors has also
recommended to Coffee Holding’s shareholders that they vote to
approve the agreement and the transaction. Coffee Holding also
received a fairness opinion in connection with the transaction. The
transaction is expected to close in the first quarter of 2023,
subject to certain conditions, including the approvals by the
requisite shareholders of Coffee Holding described above, the
listing of Pubco ordinary shares on Nasdaq, Delta having a certain
level of cash and cash equivalents at closing, as applicable, and
other customary closing conditions.
A more complete description of the terms of and
conditions of the proposed transaction and related matters will be
included in a current report on Form 8-K to be filed by Coffee
Holding with the U.S. Securities and Exchange Commission (“SEC”) on
or about September 30, 2022. A copy of the merger and share
exchange agreement will be an exhibit to the Form 8-K. All parties
desiring details regarding the terms and conditions of the proposed
transaction are urged to review that Form 8-K, and the exhibits
attached thereto, which will be available at the SEC’s website at
www.sec.gov.
Advisors
Maxim Group LLC is serving as exclusive
financial advisor to Delta. Ellenoff Grossman & Schole LLP is
serving as counsel to Delta.
Lowenstein Sandler LLP is serving as counsel to
Coffee Holding.
About Coffee Holding
Founded in 1971, Coffee Holding Co., Inc.
(NASDAQ: JVA) is a leading integrated wholesale coffee roaster and
dealer in the United States and one of the few coffee companies
that offers a broad array of coffee products across the entire
spectrum of consumer tastes, preferences and price points. Coffee
Holding’s product offerings consist of eight proprietary brands,
each targeting a different segment of the consumer coffee market as
well as roasting and blending coffees for major wholesalers and
retailers throughout the United States who want to have products
under their own names to compete with national brands. In addition
to selling roasted coffee, Coffee Holding Co., Inc. also imports
green coffee beans from around the world which it resells to
smaller regional roasters and coffee shops around the United States
and Canada.
About Delta
Delta is a fully integrated global business
engaged in logistics, fuel supply and asset management related
services, primarily servicing the international supply chains of
commodity, energy, and capital goods producers. Delta’s business
model is asset-light, and its service offerings facilitate the
global trade of energy, raw materials, intermediate goods, and
agricultural products. Delta is a multinational business with
offices throughout Europe, the Middle East and Asia. For more
information, please see Delta’s website at www.wearedelta.com.
Additional Information and Where to Find
It
This communication is not intended to and does
not constitute an offer to sell or the solicitation of an offer to
buy any securities, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offering of securities
in connection with the proposed transaction shall be made except by
means of a prospectus meeting the requirements of Section 10 of the
Securities Act of 1933, as amended.
In connection with the proposed transaction,
Pubco, Coffee Holding and Delta will file relevant materials with
the SEC, including a Pubco registration statement on Form F-4 that
will contain a proxy statement of Coffee Holding and constitute the
prospectus of Pubco, which proxy statement/prospectus will be
mailed or otherwise disseminated to Coffee Holding shareholders.
BEFORE MAKING ANY VOTING DECISION, INVESTORS AND SECURITY HOLDERS
OF COFFEE HOLDING ARE URGED TO READ THESE MATERIALS CAREFULLY AND
IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT DELTA, COFFEE HOLDING, THE
PROPOSED TRANSACTION, AND RELATED MATTERS. The proxy
statement/prospectus and other relevant materials (when they become
available), and any other documents filed by Pubco, Coffee Holding
and Delta with the SEC, may be obtained free of charge at the SEC
website at www.sec.gov. In addition, investors and security holders
may obtain free copies of the documents filed with the SEC by
Coffee Holding by directing a written request to: Coffee Holding
Co., Inc., 3475 Victory Blvd., Staten Island, New York 10314.
Investors and security holders are urged to read the proxy
statement, prospectus and the other relevant materials when they
become available before making any voting or investment decision
with respect to the proposed merger.
Participants in the
Solicitation
Coffee Holding and its directors, executive
officers and certain other members of management and employees may,
under SEC rules, be deemed to be participants in the solicitation
of proxies from the shareholders of Coffee Holding with respect to
the proposed merger and related matters. Information about the
directors and executive officers of Coffee Holding, including their
ownership of shares of Coffee Holding common stock, is included in
Coffee Holding’s Annual Report on Form 10-K for the year ended
October 31, 2021, which was filed with the SEC on January 31, 2022.
Additional information regarding the persons or entities who may be
deemed participants in the solicitation of proxies from Coffee
Holding shareholders, including a description of their interests in
the proposed merger by security holdings or otherwise, will be
included in the proxy statement/prospectus and other relevant
documents to be filed with the SEC when they become available. The
directors and officers of Delta do not currently hold any
interests, by security holdings or otherwise, in Coffee
Holding.
No Offer or SolicitationThis
communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval, nor shall there be any sale of any securities
in any state or jurisdiction in which such offer, solicitation, or
sale would be unlawful prior to registration or qualification under
the securities laws of such other jurisdiction.
Forward-Looking Statements
This press release contains certain
forward-looking statements within the meaning of the federal
securities laws with respect to the proposed transaction between
Pubco, Coffee Holding and Delta. All statements other than
statements of historical facts contained in this press release,
including statements regarding Pubco’s, Coffee Holding’s or Delta’s
future results of operations and financial position, Pubco’s,
Coffee Holding’s and Delta’s business strategy, prospective costs,
timing and likelihood of success, plans and objectives of
management for future operations, future results of current and
anticipated operations of Pubco, Coffee Holding and Delta, and the
expected value of the combined company after the transactions, are
forward-looking statements. These forward-looking statements
generally are identified by the words “believe,” “project,”
“expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,”
“opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,”
“will continue,” “will likely result,” and similar expressions.
These forward-looking statements are subject to a number of risks,
uncertainties and assumptions, including, but not limited to, the
following risks relating to the proposed transaction: the
occurrence of any event, change or other circumstances that could
give rise to the termination of the transaction agreement; the risk
that the transaction may not be completed in a timely manner or at
all, which may adversely affect the price of Coffee Holding’s
securities; the occurrence of any event, change or other
circumstances that could give rise to the termination of the
transaction agreement; the inability to complete the transactions
contemplated by the transaction agreement, including due to failure
to obtain approval of the shareholders of Coffee Holding or other
conditions to closing in the transaction agreement; the inability
to obtain or maintain the listing of Pubco ordinary shares on
Nasdaq following the transaction; the risk that the transactions
disrupt current plans and operations of Coffee Holding as a result
of the announcement and consummation of the transactions; the
ability to recognize the anticipated benefits of the transactions,
which may be affected by, among other things, competition, the
ability of the combined company to grow and manage growth
economically and hire and retain key employees; costs related to
the transactions; changes in applicable laws or regulations; the
possibility that Pubco, Delta or Coffee Holding may be adversely
affected by other economic, business, and/or competitive factors;
and other risks and uncertainties to be identified in the proxy
statement/prospectus (when available) relating to the transactions,
including those under “Risk Factors” therein, and in other filings
with the SEC made by Pubco and Coffee Holding. Moreover, Pubco,
Delta and Coffee Holding operate in very competitive and rapidly
changing environments. Because forward-looking statements are
inherently subject to risks and uncertainties, some of which cannot
be predicted or quantified and some of which are beyond Pubco’s,
Delta’s and Coffee Holding’s control, you should not rely on these
forward-looking statements as predictions of future events.
Forward-looking statements speak only as of the date they are made.
Readers are cautioned not to put undue reliance on forward-looking
statements, and except as required by law, Pubco, Delta and Coffee
Holding assume no obligation and do not intend to update or revise
these forward-looking statements, whether as a result of new
information, future events, or otherwise. None of Pubco, Delta or
Coffee Holding gives any assurance that either Delta or Coffee
Holding or Pubco will achieve its expectations.
For further information, contact:
Coffee Holding Co., Inc.Andrew
GordonPresident & CEO (718) 832-0800
Delta Corp Holdings Limited
Joseph NelsonChief Financial OfficerPhone: +44 0203 753 5598Email:
ir@wearedelta.com
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