US: Reed's to mull taking investor on board
Reed's has suggested that it would consider bringing a strategic investor on board.
The US-based soft drinks company, which owns Virgil's and Reed's Ginger Brews, said yesterday (17 March) that it is "pursuing more traditional asset-based lenders", while opening the door to bringing investors in.
"In January the company filed an S-1 Registration Statement for US$10m with the intention of completing a rights offering at $2.25 per share," said company founder and CEO, Christopher Reed. "Due to reductions in operating expenses and improvements in gross margins that have us on track for break even in 2009, we are pursuing more traditional asset based lenders."
The company's cash flow is better than initially anticipated, Reed's noted, crediting cost-cutting and efficiencies implemented across the organisation. "Therefore, we are negotiating with companies that can lend more aggressively on our assets," Christopher Reed said.
"When we went public, the capital markets were at a premium to the private markets," he continued. "Now our current valuation is about 50% of sales, where my private beverage company counterparts are still, as late as December 2008, receiving valuations in the 200-300% of sales range from investors.
"If we could receive private company valuations as a public company, we may pursue strategic investors to come on board."
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