Colorado-based New Age Beverages Corporation (NASDAQ: NBEV) announced the signing of a definitive agreement to acquire lifestyles and beverage company Morinda Holdings, Inc based in Utah.
Consideration for the transaction will be $85 million, comprised of $75 million in cash and $10 million in New Age restricted stock based on the 40-day volume-weighted average price from closing. The cash consideration for the transaction will be sourced from New Age’s current cash balance. The transaction is expected to close in late December. At closing, Utah-based Morinda, which has operations in more than 60 countries around the world, will be bringing a minimum of $25 million in working capital and no debt.
Key Highlights:
- Merger creates the 40th largest non-alcoholic beverage company in the world with $300 million in net revenue, $20 million in adjusted EBITDA, $200 million in assets, no debt, and $40 million in cash and 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
- Provides New Age’s Health Sciences products and portfolio of CBD-infused beverages immediate access into 60 countries, especially in China and Japan
The newly combined global company will be headquartered in Denver, Colorado, with major operations in Shanghai, Tokyo, Munich, Utah and more than 20 other countries, and further strengthens New Age with the infrastructure to expand its portfolio of healthy beverages worldwide.
Hemp–CBD Legalization by Christmas?
New Age CFO Gregory Gould told Hemp Industry Daily that his company isn’t yet certain it will distribute its CBD line of beverages outside the United States, but the deal will provide the infrastructure that would allow it to do so. Like many CBD manufacturers, New Age is waiting for Congress to remove hemp-derived CBD from the Controlled Substances Act, which could happen by year’s end if lawmakers agree to a new Farm Bill.
Senate agriculture leaders have reportedly reached a final agreement on food stamp provisions within the US Farm Bill of 2018, and the included provisions for legalizing industrial hemp and its important CBD derivatives. The Nov. 29th Washington Post expects action before a Dec. 7th Congressional recess.
In other news, the US Hemp Roundtable reported a substantial contribution of $50,000 from Las Vegas-based HempWorx, a direct sales company selling hemp-derived CBD through some 200,000 members. Last week Roundtable executives testified on hemp-expansion bills before the Georgia legislature, and also were monitoring hemp-bill improvements pending consideration in Michigan’s legislature.
