New Age Beverages Corporation (NBEV) Expands Reach, Finalizing Morinda Holdings Merger


This week brings new developments in the ever-changing world of cannabis. Dec. 20th President Trump signed the Agriculture Improvement Act, colloquially referred to as the Farm Bill, which removes hemp from the Controlled Substances Act, meaning it will no longer be illegal. Just days later, New Age Beverages Corporation (NBEV), which infuses their drinks with cannabidiol (CBD), announces the completion of a merger with private company, Morinda Holdings, a Utah-based beverage and lifestyle business.

The merger creates one of the largest healthy beverage companies in the world, with a net revenue of $300 million, $20 million in adjusted EBITDA, $200 million in assets and more than $40 million in working capital. The merger will help NBEV navigate the many channels in which it can sell its products. The merger will also provide infrastructure and market access for New Age’s Health Sciences products.

The deal, which closed on Dec. 21, requires Morinda bring $25 million in working capital to the table — and by 2020, NBEV could potentially provide up to a $15 million one-time payment to the former owners of Morinda, that’s if Morinda achieves a minimum of $20 million in EBITDA for 2019.

Denver, Colorado, the home-base for NBEV will be where the new company’s headquarters are, along with major operations in Shanghai, Tokyo, Taipei, Stockholm and more than 20 other countries.

“Since [the] announcement of the merger, we have been extremely busy. New Age continues to secure major national retail distribution on its key brands, and Morinda has been rapidly expanding its new Noni+Collagen brand globally. More cost synergies are emerging from the convergence teams and the countries are extremely enthusiastic about the potential of New Age’s current and impending brand portfolio through their system. Integration is already well on track, and we have a high degree of confidence in our plans for 2019,” Chief Executive Officer Brent Willis commented.

The company’s goal – to provide healthy beverages—will have a wider scale due to this merger and analysts seem overall positive about the company. TipRanks analytics shows analysts on Wall Street consider this stock a “Strong Buy,” with a consensus price target of $6.67, which shows a potential upside of 41%. (See NBEV’s price targets and analyst ratings on TipRanks)

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