BOCA RATON, Fla., Sept. 11, 2019 /PRNewswire/ -- (Nasdaq:
CELH) Celsius Holdings Inc., maker of the leading global fitness
drink, CELSIUS®, today announced that the company has entered into
a series of definitive agreements with the shareholders,
bondholders and certain other lenders of Func Food Group Oyj, a
Finnish corporation ("Func Food"), pursuant to which Func
Food's outstanding debt will be restructured and Celsius will
acquire Func Food. Consideration for the transaction is comprised
of approximately $15.1 million in
cash and the assumption of $9.5
million of outstanding debt (assuming a foreign exchange
rate of $1.12=€1.00).
Func Food is a Nordic wellness company that markets and
distributes beverages, protein bars, supplements and superfoods
under the brands Celsius®, FAST Sports Nutrition, CocoVi
and FitFarm. Func Food represents a comprehensive portfolio of
well-being products which promote active and, healthy lifestyles by
investing in high-quality ingredients and best-in-class food and
beverage expertise. Celsius first began its relationship with Func
Food in 2016 when Func Food acquired People's Choice, the former
distributor and took over the distribution of Celsius in the
Nordics, solidifying Celsius® as the best-selling
fitness drink in Sweden.
"The acquisition of Func Food is an important next step in our
strategy to build a globally dominate brand and solidifies our
position in the Nordics while opening a new distribution platform
for the rest of Europe," said
John Fieldly, President and Chief
Executive Officer. "At the same time, this transaction provides us
with the ability to bring an entirely new, yet complementary
product offering to consumers; Func Food's innovative FAST
business. The acquisition, valued significantly below our revenue
multiple, approximately 1x incremental revenue, provides immediate
accretion to our shareholders and incremental opportunities to
expand our European footprint."
Fieldly continued, "According to industry statistics, more than
half of all European consumers plan to improve their health through
food and beverages. Adding Func Food into the Celsius family will
allow us to capitalize on these areas of opportunity and benefit
from the growing Sports Nutrition and Energy Drink markets in
Europe. The strategic acquisition
of Func Food provides Celsius with additional scale and is expected
to provide a meaningful increase to our top-line, with an expected
pro-forma revenue run rate of approximately $100 million, while enabling us to maintain our
historically solid gross margins and extract significant operating
efficiencies that will allow for reinvestment for growth."
Func Food Group Oyj Chief Executive Officer Robin Lybeck comments; "The acquisition of Fund
Food by Celsius is a very welcome development to our solid
long-term partnership. Func Food has built Celsius to become a
leading fitness beverage in the Nordic markets, with exceptionally
high per capita-consumption in Sweden and we are looking forward to expanding
the footprint of this great brand as we move ahead. Together with
our category-leading offering in wellness nutrition, we are
uniquely positioned to offer a complete range of products to our
customers across current and future markets. As our key categories
continue to grow across European markets, we feel the acquisition
and our strong brands will enable us to capitalize on this
development."
Rationale of Acquisition
The acquisition of Func Food represents a meaningful opportunity
for Celsius to quickly gain critical access to the European
nutrition markets, expand its product offerings in-line with
growing market potential and position the company to capitalize on
a broader revenue base. With approximately $37.0 million in revenue and $702,000 in Adjusted EBITDA in 2018, Func Food
offers a number of synergies and benefits that are expected to be
captured through this business combination.
More specifically, Func Food
- is well connected to the European nutrition market, which will
enable quick access to distributors and customers in new European
markets;
- currently operates an established, multi-market supply chain
providing the combined entity with central production planning and
joint filling runs for new markets;
- sources the majority of its convenience products from leading
manufacturers in continental Europe, which when combined with Celsius'
production in central Europe, will
enable the creation of logistics synergies for new and existing
markets; and
- has built a unique marketing and operational platform for the
Nordics, the mechanics of which can be quickly replicated and
expanded to other markets in Europe at a reasonable cost.
In addition, the combined business is expected to enable much
stronger in-market investments to drive expansion across
Europe before expected broader
brand and market consolidation occurs. Adding Func Food's FAST
Sports Nutrition line to the Celsius® line- will provide
Celsius with new, additive revenue streams and establish an
additional product offer and platforms for growth.
Key Terms and Financing
Under the terms of the agreement, the $24.6 million purchase price will be comprised of
a cash payment of $15.1 million and
the assumption of $9.5 million of
debt (assuming a foreign exchange rate of $1.12=€1.00), and represents a purchase price
multiple of approximately 1.0x trailing 12 month revenue.
The Company intends to finance the acquisition with proceeds
from a follow-on equity public offering of $25.0 million that is being contemporaneously
announced.
The transaction, which has been unanimously approved by the
Board of Directors of Celsius and by the governing bodies of Func
Food, is expected to close in October
2019, subject to successful completion of the follow-on
offering by Celsius, required legal compliance by Func Food under
Swedish law and other customary closing conditions.
For additional information related to this transaction, please
refer to the Company's report filed on Form 8-K with the Securities
and Exchange Commission contemporaneously herewith on September 11, 2019.
About Func Food Group Oyj ("Func Food")
Func Food
Group is a Nordic wellness company, which markets and distributes
Celsius®, FAST, FitFarm and CocoVi brands in
Finland and Sweden. Func Food was built in 2014 and 2015
through various acquisitions in Finland and Sweden.
About Celsius Holdings, Inc.
Celsius Holdings, Inc.
(Nasdaq: CELH), is a global company with a proprietary, clinically
proven formula for its CELSIUS® brand and all its
sub-brands. A lifestyle fitness drink and a pioneer in the rapidly
growing performance energy sector, CELSIUS has four beverage lines
that each offer proprietary, functional, healthy-energy formulas
clinically-proven to offer significant health benefits to its
users. The four lines include, CELSIUS® Originals,
CELSIUS HEAT™, CELSIUS® On-the-Go, and
CELSIUS® Sweetened with Stevia. CELSIUS® has
zero sugar, no preservatives, no aspartame, no high fructose corn
syrup, and is non-GMO, with no artificial flavors or colors. The
CELSIUS® line of products is Certified Kosher and Vegan.
CELSIUS® is also soy and gluten-free and contains very
little sodium. CELSIUS® is backed by six university
studies that were published in peer-reviewed journals validating
the unique benefits CELSIUS® provides.
CELSIUS® is sold nationally at Target, CVS, GNC, Vitamin
Shoppe, 7-Eleven, Dick's Sporting Goods, The Fresh Market, Sprouts
and other key regional retailers such as HEB, Publix, Winn-Dixie,
Harris Teeter, Shaw's and Food Lion.
It is also available on Amazon, at fitness clubs and in select
micro-markets across the country. For more information, visit
CELSIUS® at www.celsius.com or Celsius Holdings, Inc.,
at www.celsiusholdingsinc.com.
Forward-Looking Statements
This press release may contain statements that are not historical
facts and are considered forward-looking within the meaning of the
Private Securities Litigation Reform Act of 1995. These
forward-looking statements contain projections of Celsius' future
results of operations and/or financial position, or state other
forward-looking information. In some cases, you can identify these
statements by forward-looking words such as "anticipate,"
"believe," "could," "estimate," "expect," "intend," "may,"
"should," "will," "would," or similar words. You should not rely on
forward-looking statements since Celsius' actual results may differ
materially from those indicated by forward-looking statements as a
result of a number of important factors. These factors include but
are not limited to: general economic and business conditions; our
business strategy for expanding our presence in our industry;
anticipated trends in our financial condition and results of
operation; the impact of competition and technology change;
existing and future regulations affecting our business; and other
risks and uncertainties discussed in the reports Celsius has filed
previously with the Securities and Exchange Commission. Celsius
does not intend to and undertakes no duty to update the information
contained in this press release.
Investor Relations:
Cameron
Donahue
(651) 653-1854
cameron@haydenir.com
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SOURCE Celsius Holdings, Inc.