Northland Weighs in on New Age Beverages (NBEV) Stock Following BWR Acquisition
Yesterday, CBD-infused drink maker New Age Beverages (NBEV) announced the signing of a definitive agreement to purchase Brands Within Reach (BWR). BWR owns key licensing and distribution rights in the U.S. for healthy positioned and fast growing beverages such as Nestea Ready to Drink teas, Volvic Natural Spring Water, Illy Ready to Drink Coffee in retail channels, Evian Natural Spring Water in the Natural Channel and Found Sparkling beverages , Kusmi Tea, Saint-Géron Sparkling Water and select natural and organic snacks such as Nature Addicts, Grand-Mere, Lucien Georgelin and La Mere Poulard. CEO and founder of Brands Within Reach, Olivier Sonnois, will become President of the Brands Division at NBEV.
Northland analyst Michael Grondahl commented, “We believe Brands Within Reach TTM revenue was small and would characterize the acquisition as a little tuck-in acquisition. In addition, we believe NBEV referred to a combined $320M revenue platform which is revenue guidance for 2019 and we believe this is conservative as it includes the acquisition too. We believe NBEV paid well less than 1x revenues with a portion in stock. It sounded like BRW was strong at Costco, Publix and dollar stores and works with UNFI, a distributor that NBEV was also expanding with. In talking with management, it sounds like 2Q19 is progressing well and WMT is off to a solid start and it is still a little too early at 7- Eleven. Management was excited to layer in another acquisition to grow the business and drive scale.”
Grondahl reiterates an Outperform rating on NBEV stock with an $8.00 price target, which implies nearly 65% upside from current levels. (To watch Grondahl’s track record, click here)
Most analysts back Grondahl’s confident take on the cannabis stock. Based on 4 analysts polled by TipRanks in the last 3 months, 3 rate a Buy on NBEV stock while one suggests a Hold.
To read more on the nitty gritty of what’s going on in the rising cannabis industry, click here.