Monster Beverage Announces Acquisition Of Key Supplier, Highlights Securing Intellectual Properties

Monster Beverage Corporation MNST announced after Tuesday's market close that it has entered into a definitive agreement to acquire its flavor supplier and business partner, American Fruits & Flavors, for $690 million.

Monster Beverage noted the transaction will bring its primary flavor supplier in-house and the acquisition will secure the intellectual property of its key flavors in perpetuity. The company also cited the enhancement of its flavor development and global flavor footprint capabilities.

American Fruits & Flavors supplies Monster Beverage with flavors for its Monster Energy drinks and other key flavors in its beverage portfolio.

Monster accounts for 87 percent of the company's revenues in 2015 and the relationship between the two companies date back to the mid-1990s.

"The transaction is strategic to Monster and presents a unique opportunity for us to take ownership of our most important flavors. It is also beneficial from a growth perspective and enhances earnings per share," said Hilton H. Schlosberg, Monster's Vice Chairman and President. "We have taken an important step by integrating our existing and new flavor
development and flavor production under the umbrella of our ownership and are confident AFF will act as a catalyst for further success."

Shares of Monster Beverage lost 0.79 percent on Tuesday to close at $128.79.