Discontinued Operations

12 Months Ended

Jan. 01, 2022

Discontinued Operations and Disposal Groups [Abstract]

On February 28, 2020, the Company completed the sale of S&D Coffee, Inc. ("S&D") to Westrock Coffee Company, LLC (“Westrock”), pursuant to which Westrock acquired all of the issued and outstanding equity of S&D from the Company ("S&D Divestiture”). The consideration was $405.0 million paid at closing in cash, with customary post-closing working capital adjustments, which were resolved in June 2020 by payment of $1.5 million from the Company to Westrock. The Company used the proceeds of the S&D Divestiture to finance a portion of the Legacy Primo Acquisition. See Note 5 to the Consolidated Financial Statements for additional information on the Legacy Primo Acquisition.

On January 30, 2018, the Company completed the sale of the Traditional Business to Refresco. In July 2020, a settlement agreement was reached with Refresco related to the $12.4 million of the total sale proceeds that were being held in escrow by a third-party escrow agent to secure potential indemnification claims. In exchange for a settlement of pending and future claims, $4.0 million of the escrow funds were released to Refresco and the remaining $8.4 million were released to us.

For the year ended December 28, 2019, the Company paid Refresco $0.7 million for the contract manufacture of beverage products and reimbursed Refresco $0.7 million for various operational expenses that were paid by Refresco on its behalf. For the year ended December 28, 2019, Refresco paid the Company $7.2 million for the contract manufacture of beverage products.

The major components of net income from discontinued operations, net of income taxes in the accompanying Consolidated Statements of Operations include the following:


	For the Year Ended
(in millions of U.S. dollars)		January 2, 2021		December 28, 2019
Revenue, net 1		$	97.1	$	605.0
Cost of sales		71.1		438.4
Operating (loss) income from discontinued operations		(0.5)		15.4
Gain on sale of discontinued operations		53.7		—
Income from discontinued operations, before income taxes		53.1		15.7
Income tax expense 2, 3		28.0		2.0
Net income from discontinued operations, net of income taxes		25.1		13.7

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1 Includes related party sales to continuing operations of $1.0 million and $5.9 million for the years ended January 2, 2021 and December 28, 2019, respectively.

2 During 2019, $3.0 million of tax benefit was recorded related to the finalization of the U.S. tax gain calculation for the Traditional Business Divestiture.

3 The S&D Divestiture resulted in tax expense of $28.5 million on the gain on sale in 2020 and utilized a significant portion of the existing U.S. net operating loss carryforwards.