US: XStream and Global complete unit merger
US soft drinks producer XStream Beverage Network has completed the sale of its Maryland unit.
The sale of Xstream Beverage Network of Maryland to a subsidiary of Global Beverage Solutions will lead to the two units merging, Xstream confirmed yesterday (1 March).
Under the terms of the merger agreement, XStream will receive 60.5m shares in Global. In addition, Global will issue a US$2m note payable to XStream.
The sale will help XStream reduce its debt, the company noted. "Once our debt is satisfied, we intend on exploring various options on how we might benefit our shareholders," said company chairman Ted Farnsworth. "This could include possible distributions and dividends."
XStream first acquired Beverage Network of Maryland in July 2004. The unit had revenues of $10.2m in 2005 with EBITDA of $426,000.
XStream president Jerry Pearring will step down to become the CEO of Global following the transition.
"We want to assure our shareholders that XStream Beverage is a very viable entity which will own a major stake in Global Beverage," Pearring said. "The combined entities create an outstanding platform to further develop our unique branding and distribution strategy."
XStream owns a portfolio of what it calls "New Age" drinks brands. Its stable includes Yohimbe energy drink, which contains yohimbe bark extract, vitamins and taurine.
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