New Age Beverages Corp NBEV shares were trading higher Monday after the company announced the acquisition of Morinda Holdings. The transaction will expand New Age Beverages Corp's footprint and add a new line of products to its portfolio.
What Happened
New Age Beverages will pay for Morinda with $75 million in cash and $10 million in restricted stock. In exchange, Morinda will bring $25 million in working capital and no debt. The deal is expected to create $10 million in cost and revenue synergies that can be achieved over the next 12-18 months.
Why It's Important
Morinda is a Utah-based company that focuses on products made from the noni plant. Its main product is noni juice, but it also markets skincare products and essential oils. Morinda operates as a multilevel marketing company.
The noni plant is a species of the coffee family and is known to contain antioxidants, Vitamin C and potassium. The plant has been used in traditional medicine in many cultures and has a number of benefits attributed to it, such as anti-inflamatory and anti-viral properties. Noni, or also commonly known as great morinda, is also believed to help boost the immune system and repair cellular damage.
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What's Next
New Age Beverages estimates that the merger with Morinda, which should close sometime this month, will create the 40th-largest non-alcoholic beverage company in the world; Morinda has operations in 60 countries. The expansion could also help New Age Beverages expand the reach of its recently announced portfolio of CBD-infused beverages.
New Age shares were trading higher by 7.56 percent to $4.98 at the time of publication Monday.
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