Alkaline water company Flow Beverage has sold its Verona, Virginia, production facility to BioSteel Sports Nutrition for $19.5 million.
The purchase price comprises: $13.2 million in cash and $6.3 million for the repayment of debt and retirement of lease obligations.
The deal will support the expansion of BioSteel’s US footprint, while “accelerating the path towards profitable growth of the Flow brand,” by enabling it to focus its investments on sales and marketing.
The companies have also entered into a co-manufacturing agreement, whereby BioSteel will produce Flow’s portfolio of branded water at the facility, in addition to its own sports hydration drinks.
Nicholas Reichenbach, founder and CEO of Flow, said: “The sale of the Verona production facility is a major milestone towards achieving profitable growth of the Flow brand. Through a significant reduction in our operating expenses associated with operating Verona and a material reduction in related future lease obligations, we have meaningfully improved our financial position and streamlined our organisation.
“By maintaining ownership of our Virginia artesian spring and securing a co-manufacturing agreement with BioSteel, we expect continuity in our supply chain as we invest in continued revenue growth in the US.”
Bruce Jacobson, president of BioSteel, commented: “BioSteel is growing at a record pace, with thousands of new points of distribution added since the beginning of the year, and this acquisition allows us to unlock greater efficiency in our business as we achieve full vertical integration of our US operations”.
“As we move toward the top of the sports drink category, this agreement also supports our ability to consistently supply our premium ready-to-drink sports drinks, packaged in environmentally friendly Tetra Paks, which is a competitive advantage, and support our consumers with the ‘Clean Healthy Hydration’ that the next generation of athletes demands,” he added.
© FoodBev Media Ltd 2022
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