- $50 million+ new business combination provides a scale platform in the fast growing healthy functional beverage segment
- New long-term banking partner, US Bank provided $10.7MM in funding to complete the transaction
- Combination of XingTea®, XingEnergy®, Aspen Pure®, and Búcha® Live Kombucha brands create complementary portfolio in attractive segments
- >$7.5 million in cost and revenue synergies identified from combined sales and distribution capabilities and infrastructures
DENVER, CO / ACCESSWIRE / July 6, 2016 / Búcha, Inc. (formerly American Brewing) (OTC: ABRW), the California-based owner of the Búcha® Live Kombucha brand today announced that it has completed the acquisition of Colorado-based New Age Beverages and Xing Tea. Concurrent with the closing of the transaction, the newly merged entity will be headquartered out of Denver, Colorado and will be renamed The New Age Beverage Corporation.
The closing of the asset purchase agreement coincides with a development of a new long-term banking partner in US Bancorp (US Bank), one of the most respected banks in the world and the fifth largest commercial bank in the United States. US Bank provided the funding for the transaction. The total $10.7 million dollars of debt financing is comprised of both a long-term mortgage on the Company's properties and assets and a revolving note/line of credit.
"We are pleased to support this transaction," commented Hassan Salem, Colorado Market President for U.S. Bank. "We look forward to a long-term relationship with New Age to help them achieve their goals."
THE FINAL TRANSACTION
The final transaction included a combination of cash and equity totalling $19,995,000 in return for 100% of the assets and interests of New Age Beverages including their brands XingTea®, XingEnergy®, and Aspen Pure®. The consideration included:
1. An $8.5 million cash payment
2. An issuance of common stock in Búcha, Inc. (ABRW) totalling $6,995,000.
3. A promissory note of $4.5 million in cash
The total amount of shares to be issued was based on the Volume Weighted Average Price ("VWAP") for the thirty days prior to closing. The 30-day VWAP calculated to be $1.6066 per share and equated to a total of 4,353,915 shares issued. Post issuance, on a fully diluted basis, there are now 20,797,468 outstanding in Búcha, Inc. A formal company name change has been applied for and the new Company name, New Age Beverage Corporation is expected to be finalized imminently.
Dan Carney, founder of Pizza Hut and the previous largest shareholder of New Age Beverages and XingTea® commented, "I am extremely pleased with the transaction with Búcha, Inc, and I am excited to be a shareholder of the new company going forward. I have enjoyed my time helping build the business and am confident that this platform will allow someone like Mr. Willis to take it to the next level. It's why I wanted equity in the new Company, because I am confident the team will make it significantly more valuable and capture the full potential of the business."
THE NEW COMPANY - NEW AGE BEVERAGE CORPORATION
The New Age Beverage Corporation will compete in the growth segments of the Ready-to-Drink (RTD) beverage category. The Company currently competes in the RTD Tea segment with its XingTea® brand, in the rapidly growing Kombucha segment with Búcha® Live Kombucha, and on a regional basis in the West in Functional Waters with its Aspen Pure® brand. The Company also just launched its new XingEnergy® brand, a naturally flavored, GMO free, cane sugar product to begin competing in the Energy Drink segment.
The combined companies generated more than $53 million in revenue, on an unaudited basis, for the calendar year 2015, with more than $10 million in gross profit, and more than $3 million in free cash flow. With substantially lower interest expense for the new company, continued topline growth, tight cost control and the capturing of identified synergies, the new operation is expected to deliver consistent top and bottom line growth performance.
"We have a great set of brands in the right growth segments," commented Scott LeBon, who will lead the operating company, NABC, Inc. as Chief Executive. "Kombucha is up 40% year over year, and I think we have the best tasting brand in that category by far. RTD Tea is growing at 4% and Functional Waters are up 12%, and we have great brands that we can now invest in and grow… around the world. I am very excited to drive our performance and win in the market."
COST AND REVENUE SYNERGIES
The organization is focused on capturing cost and revenue synergies to strengthen the financial platform of the Company. The group previously announced a target of $7.5 million to be captured over the next 12 to 18 months. Since that announcement, the team has identified the specific synergies and assigned accountabilities to secure the savings, with more than one half of the committed synergies coming from cost savings.
Brent Willis, Chief Executive of the parent company New Age Beverage Corporation (Búcha Inc.), and former senior leader at AB InBev and the Coca-Cola Company commented, "The transaction from start to finish happened quickly and seamlessly. The overall consideration for the acquisition of $19.9 million and financing of the cash portion of it at 3.7% interest rate is definitely in shareholder's best interests. We are very fortunate to have US Bank as a long-term partner and are excited about the potential of the combination of the businesses. Our focus now is to integrate the operations, expand distribution on the entire portfolio, and drive out costs to further improve our margins and facilitate growth."
Advising on the transaction was Greg Barrow, Managing Director of General Capital Partners, and food and beverage industry veteran Eric Skae, Founder and Managing Partner of the Bricktown Group. Mr. Barrow commented, "Of the 150 plus engagements that we have been involved in, this was one of the most efficient and most beneficial for all parties. From the time we started until closing was less than 60 days, with full diligence completed by multiple parties and funding by a major financial institution. I am excited to be a shareholder in the new venture that brings together very complementary brands and a great leadership team."
About New Age Beverage Corporation (Búcha, Inc.)
New Age Beverage Corporation is a Colorado-based firm founded in 2016 and was created through the combination of XingTea®, Aspen Pure® Artesian Water, Búcha® live Kombucha, and New Age Beverages. The Company trades under the ABRW symbol on the OTC exchange and intends to file with FINRA for a new trading symbol as soon as the Company name change is finalized. The Company competes in the fast growing healthy functional beverage segments including Ready to Drink (RTD) Tea, Kombucha, Energy Drinks and Functional Waters with the Brands XingTea®, búcha® Live Kombucha, XingEnergy®, and Aspen Pure®. The brands are sold in 46 states within the US and in more than 10 countries internationally across all channels via direct and store door distribution systems. The company operates the websites www.mybucha.com, www.xingtea.com, www.aspenpure.com.
About General Capital Partners (GCP)
General Capital Partners (GCP) was founded in 2002 and provides financial and strategic advisory services for mid-size private and public companies. GCP has built a solid reputation in special and turnaround situations. Since 2011, GCP has focused on supporting food and beverage companies in the $290 Billion Lifestyles of Health and Sustainability (LOHAS) market, delivering unparalleled results and consistent execution to companies in the $10 to $500 million range in revenue. The group has completed over 150 engagements across multiple industries and serves companies across the United States looking to transform their financial and strategic trajectories.
Safe Harbor Disclosure
This press release contains forward-looking statements that are made pursuant to the safe harbor provisions within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are any statement reflecting management's current expectations regarding future results of operations, economic performance, financial condition and achievements of the Company including statements regarding American Brewing's expectation to see continued growth. The forward-looking statements are based on the assumption that operating performance and results will continue in line with historical results. Management believes these assumptions to be reasonable but there is no assurance that they will prove to be accurate. Forward-looking statements, specifically those concerning future performance are subject to certain risks and uncertainties, and actual results may differ materially. American Brewing competes in a rapidly growing and transforming industry, and other factors disclosed in the Company's filings with the Securities and Exchange Commission might affect the Company's operations. Unless required by applicable law, ABRW undertakes no obligation to update or revise any forward-looking statements.
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SOURCE: Búcha, Inc.