Reed's Allows Jones Soda to Pursue Alternative Options
"Merger with Jones is not a necessity for Reed's," CEO says
LOS ANGELES -- Reed's Inc., maker of the top-selling sodas in natural food stores nationwide, said yesterday that Jones Soda Inc. has received an unsolicited offer by a third party and has terminated the exclusivity provision of the letter of intent signed with Reed's Inc. on March 9, 2010.
As stated in the letter of intent, Reed's had come to mutual terms with Jones Soda to acquire the company for approximately $9.8 million in cash and stock. On March 19, 2010, Jones Soda informed Reed's that it received an unsolicited proposal that it would like to pursue while continuing [image-nocss] to have discussions with Reed's.
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Chris Reed, founder, chairman and CEO of Reed's, said, "Jones management has a fiduciary responsibility to its shareholders to consider any offers to buy the company, and we respect that. As of yet, we have not seen the terms of the new offer; however, I would like to reiterate that our offer is based mostly on stock, which has not yet reflected the value of the post-merger company. The post-merger Reed's Inc. would be worth more than the two companies alone due to the significant cost savings associated with the consolidation of operations. While both companies have struggled with profitability over the past few years, the combined entity would most probably not. Reed's Inc. should be profitable in 2010 even without this merger."
He added, "The merger with Jones is not a necessity for Reed's, as our business is healthy and picking up momentum on all fronts. We reiterate our guidance for double-digit growth in 2010, and we will continue to look for other opportunities for synergistic acquisitions in the course of building our business."
Los Angeles-based Reed's makes the sodas sold in natural food markets nationwide and is currently selling in 10,500 supermarkets in natural foods and mainstream. Its six nonalcoholic Ginger Brews are brewed, not manufactured, and use fresh ginger, spices and fruits in a brewing process that predates commercial soft drinks. The company also owns a root beer line, the Virgil's Root Beer product line, and a cola line, the China Cola product line. Recently, Reed's added the Sonoma Sparkler brands to its line. Other product lines include Reed's Ginger Candies and Reed's Ginger Ice Creams.
Reed's products are sold through specialty gourmet and natural food stores, mainstream supermarket chains, retail stores and restaurants nationwide, and in Canada.
Headquartered in Seattle, Jones Soda markets and distributes premium beverages under the Jones Soda, Jones Pure Cane Soda, Jones 24C, Jones GABA, Jones Organics, Jones Naturals and Whoopass Energy Drink brands and sells through its distribution network in markets primarily across North America. A leader in the premium soda category, Jones is known for its variety of flavors and innovative labeling technique that incorporates changing photos sent in from its consumers.
Jones Soda is sold through traditional beverage retailers.