US: XStream and Global poised to merge units
XStream Beverage Network is set to merge its Maryland unit with a subsidiary of Global Beverage Solutions.
The US brand development and distribution company said yesterday (18 December) that it will receive "a significant stake" in Global Beverage as part of the move.
The merger of Xstream Beverage Network of Maryland with GBVS Acquisition Corp. is valued at around US$33m. The two parties have signed a letter of intent which is dependent on a definitive agreement by the end of this month.
"We believe this transaction will enable us to reduce our debt and further enhance value for our shareholders," said XStream Beverage chairman and CEO Ted Farnsworth. "Once our debt is satisfied, we intend on exploring various options on how we might benefit our shareholders including possible distributions and dividends."
Farnsworth said that the company also intends to sell its brands in a separate transaction. "We feel that with all the interest in the New Age beverage category this is the perfect time to take advantage of the demand for quality products, specifically those that fit growing niche markets such as the energy drink sector," he said. "Other entities have already expressed keen interest in our Maui Juice, Chinese Rocket Fuel, Spa Water and Squeeze Soda brands."
Xstream's president, Jerry Pearring, added: "We want to assure our shareholders that XStream Beverage is a very viable entity which will own a major stake in Global Beverage.
"The combined entities create an outstanding platform to further develop our unique branding and distribution strategy."
XStream acquired the assets of XStream Beverage Network of Maryland, formally Master Distributors, in July 2004. Last year, the company had revenue of $10.2m with EBITDA of $426,000.
Among Global Beverages' drinks portfolio is the sports drink company Rudy Beverages.
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