CORONA, Calif. -- Monster Beverage Corp. has announced today that it has entered into a definitive agreement to acquire flavor supplier and long-time business partner, American Fruits & Flavors (AFF).
Monster will purchase AFF for $690 million.
Upon closing the transaction, Monster will acquire approximately $87 million of adjusted operating income. The transaction, which the companies expect to close in the first quarter of 2016, is subject to customary closing conditions.
“It is important to acknowledge this transaction represents much more than the acquisition of AFF,” said Fred Farago, founder and president of AFF. “We view today’s announcement as the integration of two companies that have enjoyed a tremendously symbiotic relationship over many years. We look forward to joining the highly respected and experienced Monster team to help the company further enhance its position as a global leader in the industry.”
The acquisition brings Monster’s primary flavor supplier in-house and secures Monster’s ownership of the intellectual property created with AFF for its flagship Monster Energy energy drinks as well as several other key flavors in its beverage portfolio.
“It is with great pleasure that we announce the acquisition of AFF as it marks a tremendous step in the continuing evolution of Monster,” said Rodney C. Sacks, chairman and CEO of Monster. “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.”
He added, “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.”
Hilton H. Schlosberg, Monster’s vice chairman and president, said, “We have taken an important step by integrating our existing and new flavor development and flavor production under the umbrella of our ownership and are confident AFF will act as a catalyst for further success.”
The transaction also provides Monster with an opportunity to more effectively and profitably deploy AFF’s flavor keys and intellectual property in Monster’s growing international supply chain strategy.
The two companies have worked closely together since the mid-1990’s in developing new products and taste profiles.
Los Angeles-based American Fruits & Flavors is a leading industrial supplier engaging in the development, production and marketing of flavors, flavor systems, juices, concentrates, natural sweeteners and fruit-based products to a global customer base. AFF operates via two integrated and complementary divisions, both of which have the capability to develop custom products for customers: a Flavors division and a Juice Operations division.
Based in Corona, Calif., Monster Beverage is a holding company with subsidiaries that develop and market energy drinks, including Monster Energy, Monster Energy Extra Strength Nitrous Technology, M3 Monster Energy Super Concentrate, Muscle Monster Energy Shakes, Übermonster, NOS, Full Throttle, Burn, Samurai, Relentless, Mother, Power Play, BU, Nalu, BPM, Gladiator and Ultra energy drinks; Monster Rehab non-carbonated energy drinks with electrolytes; and Java Monster non-carbonated coffee + energy drinks.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.