NewAge, Inc. announced a manufacturing partnership with TCI Co., Ltd., a Taiwan-based company. The manufacturing agreement includes the sale of the company’s US manufacturing facility and Utah-based office to TCI for a combination of $3.5 million in cash, plus a share of revenues over the next five years.
TCI, a preeminent manufacturer of functional drinks, skincare and nutritional supplements with almost $300 million in annual revenue, is expected to take over production within the next 90 days. NewAge will continue to produce its Tahitian Noni Juice extractions in its own processing facility in Tahiti, where the company sources almost 90% of its Noni.
“TCI has been one of the fastest-growing companies in Asia over the past five years, and we see this partnership with NewAge as a further accelerant for us,” said Vincent Lin, TCI Chief Executive Officer. “We are incredibly excited to be working with NewAge, that has been one of the fastest-growing CPG companies worldwide. Their more than 400,000 brand partners and direct-to-consumer system is an emerging competitive advantage for them. We expect to enable them even more by focusing on what we do best with our world-class manufacturing, our integrated bioscience, and the leverage of our extensive patent and product development pipeline.”
This new collaboration is expected to be a beneficial collaboration for both parties, as NewAge focuses on the commercialization of its portfolio and reduces overhead by leveraging TCI’s manufacturing expertise. NewAge also expects significant benefit from revenue sharing over the next five years, while TCI reports projected value in the expansion of its operations and customer base in the US.
“This is a great deal for both TCI and NewAge, and we expect this to be just the beginning of a long-term very successful partnership,” said Phil Lewis, SVP of Operations for NewAge. “TCI brings incredible technology and manufacturing expertise to the venture enabling NewAge to focus on leveraging its sales and marketing capabilities and global distribution network. The opportunity for NewAge to both reduce costs and lower SG&A will have a direct impact on our bottom line in 2021, and the efficiency and quality improvements from working with a company like TCI, initially in the US and then in other markets around the world, will have long-term strategic benefits.”
