Búcha, Inc. (OTCBB:ABRW), formerly American Brewing Company, has announced the signing of a merger agreement, with New Age Beverages Group. It is expected that the resulting company would be a leader, in the healthy functional beverage industry. Cost and revenue synergies, as a result of the agreement, are estimated to be in excess of $7.5 million.
The merger has been valued at around $20 million, allowing Búcha to acquire all assets from New Age Beverages, as well as their three leading products Xing Tea, Xing Energy and Aspen Pure. A total of $8.5 million would be paid in cash, to the majority stakeholder of New Age Beverages, while an additional $7 million would be paid in stock to the majority owner and executives of the company. The remaining $4.5 million would be deferred, for a period of six months, after closing of the transaction, at which point the Búcha would pay the amount in cash.
ABRW has disclosed that it plans to finance the initial cash payment, by acquiring debt, from creditors that have offered it attractive rates. Furthermore, the company has a total of 25 million shares outstanding. The closing date for the transaction has been set as June 30, 2016. Moreover, the newly formed company would be named New Age Beverages Corporation and Brent David Willis would be the CEO of the combined entity.
Upon his appointment, the CEO stated that the merger has created a strong new platform for them to compete against larger companies in the beverage sector. He also disclosed that he plans to build a one-stop-shop for retailers. Búcha Inc had recently hired Robert Miranda as its new CFO, along with Miranda CFO Services Inc, as the CFO consulting firm. The move had helped ABRW to save $100,000 in annual operating expenses, which it believed would have a positive impact on FY2016 earnings.
Búcha, Inc. (OTCBB:ABRW) reported a massive gain of 42.11%, during the May 24 trading session, after having a trade volume of only 517,238, to reach a close at $1.35 per share.