Shares of New Age Beverages Corp (NASDAQ:NBEV) soared in Monday’s pre-market session after the Colorado beverage company unveiled a deal to buy Morinda, a rival beverage company based in Utah, for $85 million.
Under the terms of the deal, New Age will pay $75 million in cash and $10 million in New Age restricted stock to complete the takeover. After the deal closes, Morinda will provide at least $25 million in working capital and no debt.
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Investors applauded the takeover, sending New Age Beverages shares up 14.9% before the opening bell on Monday to $5.32.
The combined company will be headquartered in Denver, Colorado with operations in Shanghai, Tokyo, Munich, Utah and more than 20 other countries.
The two companies are projecting that the merger, which is set to close in December, will result in $10 million in cost and revenue synergies over the next 12 to 18 months.
Together, the combined non-alcoholic beverage company will have $300 million in net revenue, $200 million in assets, no debt and $40 million in cash and working capital, according to New Age Beverages.
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New Age, which is the maker of CBD-infused beverages has been the subject of investor interest since earlier this year when rumors emerged that the company might be acquired by The Coca-Cola Company (NYSE:KO).
Founded in 1996, Morinda is a beverage company with operations in more than 60 countries and manufacturing operations in Tahiti, Germany, Japan, the US and China. The bulk of Morinda’s sales are driven by its lead drink, Tahitian Noni-Juice and its four main markets are China, Japan, the US and Germany.
“Morinda adds New Age's portfolio of healthy beverages to its network to drive further growth alongside its lead brand, Tahitian Noni,” said Brent Willis, New Age’s CEO in a statement. “New Age adds significant scale, and infrastructure to accelerate growth, especially of its CBD-infused beverages and Health Sciences portfolio.“
Contact Ellen Kelleher at ellen@proactiveinvestors.com