February 24, 2016

Monster Beverage Corp. to acquire American Fruits & Flavors

Monster Beverage Corporation announced that it has entered into a definitive agreement to acquire flavor supplier and long-time business partner, American Fruits & Flavors (AFF).

Pursuant to the terms of the transaction, Monster will purchase AFF for $690 million. Upon closing the transaction, Monster will acquire approximately $87 million of adjusted operating income for the twelve months ended December 31, 2015. The transaction, which is expected to close in the first quarter of 2016, is subject to customary closing conditions.

The acquisition brings Monster’s primary flavor supplier in-house and secures Monster’s ownership of the unique intellectual property created with AFF for its flagship Monster Energy energy drinks as well as several other key flavors in its beverage portfolio, the company said.

The two companies have worked closely together since the mid-1990’s in developing new products and taste profiles. AFF has grown at an approximately 8% organic revenue CAGR over the last four years, with Monster as its largest customer, representing approximately 87% of AFF’s revenues in 2015.

The acquisition is expected to be accretive to Monster’s earnings during 2016.

Barclays served as financial advisor and Jones Day served as legal advisor to Monster. Lazard served as financial advisor and Sheppard, Mullin, Richter & Hampton LLP served as legal advisor to American Fruits & Flavors.





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