NewAge Inc (fka NBEVQ) (NBEVQ)

[Roland Rick Perry]

Bucha Live.

American Brewing's (ABRW) $0.40 (client) acquisition of Bucha Live last week made front page news on BevNet, an industry magazine which goes out to 21,000 readers including beverage distributors/retailers and manufacturers.

We’ll have a detailed report out this week. While the company did not breakout revenues of Bucha Live, a recent news article which interviewed Neil Fallon CEO noted him saying that Bucha had revenues three times that of American Brewing ($814 thousand for nine-months). So we’ll guesstimate around $3 million, which would put the combined company revenue at around $4 million. Not bad.

We have been told by many we have talked to that Bucha’s Blood Orange has legs and could be a breakout brand, due to it’s unique flavor (least pungent) amongst all Kombucha drinks. Some are calling it the best tasting Kombucha on the market today and most palatable to the masses.

http://www.bevnet.com/reviews/bucha/Blood_Orange

More importantly, virtually overnight - American Brewing goes from small craft brewer to publicly traded beverage company on the look out for acquisitions. We have been looking for a company like this. In the short time since we launched the Beverage Stock Review, we have looked dozens of publicly traded companies (and 100’s of private) and have quickly noticed two dynamics.

#1. Most small beverage companies have a game-plan to grow to a certain critical mass and then sell to one of the majors. Doesn’t matter if they make coffee, tea, beer or a flavor infused Vodka. They all have seem to have “the" game-plan.

#2. 100’s if not 1000’s of small private beverage companies are having a difficult time accessing growth capital and yet they do not have the desire to go through the painstaking process of going public, via a reverse merger or filing a registration statement.

Using alternative methods for going public (without an investment banker) can be costly, fraught with unforeseen dangers and is not for the faint at heart. And of course no guarantee to cheap money. Being public, having a symbol, a product and a logo does not mean investors will be lining up to give a company money (not to burst anyones bubble).

So we’ve been thinking, what if someone (who knew what they were doing - either though investment banking background or hands on experience) created a public vehicle to acquire quality start-up beverage companies which are still too small to be acquired by one of the majors, but not bold enough to venture onto the publicly traded markets on their own.

Wouldn’t a company like that be able to “cherry-pick” start-ups which are quickly showing market acceptance (flavor, ingredients, packaging) well before they even hit the radar screens of the majors? Wouldn’t that be a great way to build a portfolio of great brands?

Maybe, just maybe American Brewing can become that type of company. Of course only time will tell. But certainly it’s worth putting on your watch list.

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