New Age Beverages (NBEV) Completes Merger with Morinda Holdings
New Age Beverages Corporation (NASDAQ: NBEV), the Colorado-based organic and natural beverage company focused on becoming the world's leading healthy beverage company, today announced the closing of the merger with Morinda Holdings, Inc., a Utah-based healthy beverages and lifestyles company with operations in more than 60 countries around the world.
KEY HIGHLIGHTS:
Merger creates one of the largest healthy beverage companies in the world with $300 million in net revenue, $20 million in adjusted EBITDA, $200 million in assets, and over $40 million in working capital
Combination brings a leading portfolio of healthy beverages, with multi-channel penetration spanning traditional retail, e-commerce, and in-home; with a hybrid route-to-market spanning direct-store-delivery (DSD), wholesale, and direct-to-consumer.
Merger provides infrastructure and market access for New Age's Health Sciences products and portfolio of CBD-infused beverages worldwide
Consideration for the transaction was $85 million, comprised of $75 million in cash and $10 million in New Age common stock based on the 40-day volume-weighted average price ("VWAP") calculated through December 20, 2018. The 40-day VWAP was calculated to be $4.96 per share and equated to a total of 2,016,480 shares issued. The cash consideration for the transaction was sourced from New Age's cash balance. The transaction closed on December 21, 2018.
At closing Morinda will be bringing $25 million in working capital. In 2020, New Age may provide up to a $15 million one-time payment in either cash or common stock to the former Morinda owners based on Morinda achieving a minimum of $20 million in EBITDA in 2019.
The newly combined global company will be headquartered in Denver, Colorado with major operations in Shanghai, Tokyo, Taipei, Stockholm, Munich, Utah, and more than 20 other countries, and further strengthens New Age with the infrastructure to expand its portfolio of healthy beverages worldwide.
Since announcement of the merger on December 3, 2018 , New Age's and Morinda's teams have been working on convergence including capturing more than $10 million in anticipated cost and revenue synergies. Management has also held meetings with key executives and distributors around the world to discuss the merger, its implications, benefits, and the potential revenue synergies in each major market. The convergence work and market reviews have confirmed the potential of the cost synergies and revenue synergies, in particular the potential for the sale of New Age's existing brand portfolio, New Age's Health Sciences portfolio, and New Age's impending portfolio of CBD-infused beverages.
Brent Willis, Chief Executive Officer of New Age Beverages commented, "Since announcement of the merger, we have been extremely busy. New Age continues to secure major national retail distribution on its key brands, and Morinda has been rapidly expanding its new Noni+Collagen brand globally. More cost synergies are emerging from the convergence teams and the countries are extremely enthusiastic about the potential of New Age's current and impending brand portfolio through their system. Integration is already well on track, and we have a high degree of confidence in our plans for 2019."
The scale, critical mass and profitability of the combined company, coupled with an expanded portfolio of healthy beverages, positionsNew Age to be able to capture significant growth in major markets around the world. Its multi-channel penetration and hybrid route-to-market will allow New Age to disintermediate its brand building approach to complement an already disruptive brand portfolio, and accelerate accomplishment of its mission to become the world's leading healthy beverage company.
Mon, 24 Dec 2018 11:47:47 -0500
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Related tickers: NEW AGE BEVERAGES CORP (NBEV)
