New Age Beverages Corp (NASDAQ: NBEV) is having an incredibly strong start to the trading session this morning, and for good reason. The company announced merger news that excited investors, sending the stock screaming for the top. Today, we’ll talk about:
- The merger;
- what we’re seeing from NBEV as a result; and
- what we’ll be watching for with regard to the stock ahead.
NBEV Announces Merger
As mentioned above, New Age Beverages is having an incredibly strong start to the trading session this morning after announcing merger news. In a press release issued early this morning, the company announced that it has entered into a definitive agreement to acquire Morinda Holdings.
In the release, NBEV informed investors that Morinda Holdings is a healthy lifestyles and beverage company headquartered in Utah. However, the company has operations in more than 60 countries around the world.
Through the merger, NBEV will become the 40th largest non-alcoholic beverage company in the world. It is expected that the combined company will generate $300 million in net revenue and $20 million in adjusted EBITDA. Not to mention, the combined company will have about $200 million in assets with no debt and around $40 million in cash and working capital.
Under the terms of the agreement, NBEV will pay $85 million total. This payment will be made with both cash and stock. $75 million will be paid in cash with $10 million paid in restricted stock based on the 40-day volume-weighted average price of closing.
In a statement, Kerry Asay, CEO at Morinda, had the following to offer:
We are so excited to be combining with New Age. When we envisioned what we could achieve with New Age’s portfolio through our system, we knew how transformative it could be for all our employees and independent distributors around the world. I have guided Morinda since its creation for the past 22 years, and am so proud of what we have accomplished. I am highly confident that Brent will lead our company to even greater heights, and I am very excited to become a shareholder of New Age. Now as a public company, with all the resources that Morinda will bring to the integrated Company, we see tremendous potential for all our employees, independent distributors and shareholders for growth and significant wealth creation.
The above statement was followed up by Brent Willis, CEO at NBEV. Here’s what he had to say:
This merger is excellent for both Morinda and New Age. Morinda adds New Age’s portfolio of healthy beverages to its network to drive further growth alongside its lead brand, Tahitian Noni. New Age adds significant scale, and infrastructure to accelerate growth, especially of its CBD-infused beverages and Health Sciences portfolio. It is exciting to lead this company that has grown from $2 million to over $300 million in two-and-a-half years. We still feel like we are just getting started, and are excited to work with our new associates from Morinda to build the world’s leading healthy beverage company.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to work in the market is that the news leads to moves. In the case of New Age Beverages, the news proved to be overwhelmingly positive. After all, the merger will not only make the company stronger, it will expand its reach, bring in new products, and maintain a debt-free balance sheet. So, it’s not surprising to see that excited investors are pushing the stock toward the top today. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (8:03), NBEV is trading at $5.34 per share after a gain of $0.71 per share or 15.33% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the iWatch Markets team will continue to keep a close eye on NBEV. In particular, we’re interested in following this transaction as it is a highly accretive one for shareholders. We’re also interested in learning more about the sales volume on the company’s CBD-infused beverages. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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