Bucha and New Age Beverages have entered into an agreement to merge in a cash and equity deal worth approximately $20m.
The combined entity is intended to enhance the company's scale, improve the company's infrastructure and leadership team, and accelerate the sales and distribution capacities of the firm, thereby resulting in cost and revenue synergies exceeding $7.5m.
The agreement entails all assets and interests of New Age Beverages including their brands XingTea, XingEnergy, and Aspen Pure.
An initial cash payment of $8.5m to the majority stake owner of the firm will be made at the time of closing of the transaction along with the issuance of common stock in Bucha to the executives and majority owner totaling around $7m.
The initial cash payment of $8.5m will be funded through debt from one of the sources that have committed to provide financing. The deal is expected to be completed on or around 30 June 2016.
The new entity, which will be renamed as the New Age Beverages Corporation, will own brands such as Búcha Live Kombucha in the kombucha category, XingTea in the RTD tea category, the new XingEnergy in energy drinks, and Aspen Pure in functional waters.
New Age Beverages will be headquartered in Denver, Colorado.
The combined company CEO Brent David Willis said: "The combination of New Age and Búcha creates a credible platform to compete against the traditional large beverage companies. I am excited to lead the new company together with Scott and Tom, who I have known for a long period of time.
"They are very well respected in the industry and I am confident that we will be highly complementary in what we bring to the new operation. We will have the scale and capabilities to effectively compete, and will provide a one-stop-shop for retailers with excellent growth brands that meet consumer's needs for healthier alternatives."
The group plans to expand XingTea into Búcha's food, drug, and mass customers. Likewise, it also expects to expand the Búcha Live Kombucha brand into XingTea's food, drug, and mass customers. The new entity will also expand Búcha into New Age's captive DSD distribution system that covers 4,500 outlets.
