Coffee Holding ( NASDAQ: JVA ) said Friday it will be acquired by Delta Corp in a stock swap deal to form a new holding company incorporated in the Cayman Islands, sending its shares down 6.2% .
Delta is engaged in bulk and energy logistics, fuel supply, commodities and asset management.
JVA shareholders will receive 1 share of the combined firm for each share they own and Delta shareholders will exchange their stock for $625M in the combined firm's shares at an implied diluted value of $5.50/share.
The combined firm will have an implied diluted pro forma enterprise value of ~$655M.
Once the deal closes, Delta shareholders are expected to own ~95.21% of the combined firm's outstanding shares and JVA shareholders will own ~4.79% of outstanding stock immediately prior to closing.
The deal includes an earnout to existing Delta shareholders, which consists of $50M of additional shares of the combined firm, which would be issued to the shareholders if the company achieves $70M or greater of net income for FY23.
The combined firm, Delta Corp, is expected to trade on Nasdaq under the ticker "DLOG".
The company will continue to operate under Delta's management, while JVA will continue to be led by its CEO Andrew Gordon as a unit of the combined firm.
The deal is expected to close in Q1 2023.
For further details see:
Coffee Holding to be acquired by Delta Corp in stock swap deal; shares fall 6%