Citron Research • 25 Comments
Tue, Feb. 23, 4:37 PM
- The energy drink maker adds it's acquiring ~$87M in 2015 adjusted op. income, and that AFF has delivered an 8% organic revenue CAGR over the last four years. Monster accounted for 87% of AFF's 2015 revenue.
- CEO Rodney Sacks: "Not only have we secured the intellectual property of our flagship green energy drink and many of our other key flavors, but we are also partnering with an organization I have personally worked with and known for over 20 years ... This transaction provides Monster a unique opportunity to leverage new flavor technologies and differentiate ourselves from our largest competitors who do not have these capabilities."
- The deal is expected to close in Q1. and be accretive to 2016 earnings. Monster is unchanged after hours.
Feb. 14, 2015, 10:13 AM
- Craft soda is starting to become a trend to watch closely, according to industry insiders.
- Though still accounting for only ~1% of the total U.S. soda market, major retail chains have increasingly been willing to bet on local craft brands in store aisles.
- The craft craze is old news for the beer industry where coming-of-age millennials buy craft/local beers at a 50% higher rate than brand-loyal older generations. Fading stars such as Budweiser and Bud Light are testament to the impact of the millennial paradigm.
- The craft influence in coffee hasn't been lost on Starbucks which has strategically deployed trucks on college campuses in an effort to win over students.
- Despite the progressive reputation of Starbucks, analysts think new upstarts such as Craft (subscription) and Cups (app) have a shot of gaining influence with the Indie-minded millennial crowd on "customization" and pricing.
- What to watch: An increase in M&A activity in the beverage sector is expected as major companies strategically pick off more local craft brands to incubate.
- Craft beer watch: BUD, OTCPK:SBMRY, TAP, OTCQX:HEINY, SAM, BREW, STZ, OTC:BIBLF, OTCPK:BRBMF.
- Craft coffee watch: GMCR, SBUX, JVA, SJM, KRFT, DNKN, QSR, MCD.
- Craft soda watch: PEP, KO, MNST, COT, DPS, OTCQB:JSDA, REED, SODA, FIZZ.
Aug. 16, 2014, 8:25 AM
- So why didn't Coca-Cola (NYSE:KO) just go all the way and acquire all of Monster Beverage (NASDAQ:MNST) instead of stopping at an asset swap and a 16.7% stake?
- More than anything, "it's about protecting the [Coke] brand and the image" from a company that urges consumers to "unleash the beast" with drinks such as Assault and Khaos, said a person close to Coke.
- Coke figures it deals with enough controversy from those who blame sugary sodas for obesity and diabetes; it wants to keep at arm's length from the more serious public relations battles facing the energy drinks industry, including an FDA probe over deaths possibly linked to Monster.
- On the financial side, the deal involves a reasonable $2.1B cash up front, while a full acquisition would have required at least $12B based on Thursday's closing stock price - roughly equivalent to the amount of cash Coke had on hand at the end of July.
- Despite the cautious approach, Coke could still own Monster some day; a standstill agreement limits KO to increasing its stake to 25% over four years, but MNST's board can waive it at any time.
Aug. 14, 2014, 4:51 PM
- Coca-Cola (NYSE:KO) is acquiring a 16.7% stake in Monster Beverage (NASDAQ:MNST) as part of a strategic alliance. Coke will make a $2.15B net cash payment to Monster at the time of the deal's closing, which is expected in late 2014 or early 2015.
- As part of the deal, Monster will transfer its non-energy businesses to Coke, and "enter into expanded distribution agreements." Monster will transfer its Hansens Natural Sodas, Peace Tea, Huberts Lemonade and Hansens Juice Products brands, among others.
- At the same time, Coke will "transfer ownership of its worldwide energy business, including NOS, Full Throttle, Burn, Mother, Play and Power Play, and Relentless," to Monster.
- Coke will have two directors on Monster's board. The partnership follows Coke's February deal with Keurig Green Mountain. Coke: "Our equity investment in Monster is a capital efficient way to bolster our participation in the fast-growing and attractive global energy drinks category."
- Monster: "Our agreement enables us to focus on our core energy business, while leveraging the strength of The Coca-Cola Companys powerful distribution and bottling system on a worldwide scale."
- MNST +25.6% AH.
Jun. 27, 2012, 12:33 PM
Anheuser-Busch InBev (BUD +0.7%) trades higher as the ripple effect of a takeover of Grupo Modelo continues to get bandied about. Though a deal is far from final, it's believed A-B would need to divest its Busch, Busch Light, and Natural Light brands to gain regulatory approval. While analysts and investors seem to approve a potential merger for the most part (put options soar?), waiting in the wings is SABMiller (SBMRY.PK) - long-rumored to a takeover target. Also up in the air: A-B's pursuit of Monster Beverage (MNST).| Jun. 27, 2012, 12:33 PM | 2 Comments
May 1, 2012, 10:00 AM
Monster Beverage (MNST +2.1%) trades higher as all the dust settles from its roller coaster ride to above $83 on a report Coca-Cola was talking about buying the company. Though Coca-Cola (KO +0.1%) denies being in discussions, sources say the company is wordsmithing a bit after it backed off a proposed deal after shares of MNST ran up 28% lickety-split.| May 1, 2012, 10:00 AM
Apr. 30, 2012, 1:12 PM
Apr. 30, 2012, 11:53 AMMonster Beverage (MNST +17%) soars after the WSJ reports Coca-Cola (KO -0.3%) is interested in buying the company, and could sell bottling assets to pay for the deal. Monster shares have been halted after hitting circuit breakers. Update (11:58 ET): Monster has resumed trading, and is now up 26.2%. | Apr. 30, 2012, 11:53 AM | 1 Comment
Mar. 12, 2012, 4:57 PM
Bloomberg speculates Monster Beverage (MNST) could prove a tempting acquisition target for the likes of Coca-Cola (KO), which looks to capture more of the U.S. energy drink business and could use its strong distribution network to broaden MNST's prospects overseas. Despite MNST's market cap surging past $10B, earnings should grow another 70% in 2012.| Mar. 12, 2012, 4:57 PM