TORONTO — BioSteel Sports has purchased Flow Beverage Corp.’s production facility in Verona, Va., for $19.5 million.
Flow and BioSteel, both based in Toronto, also have entered into a co-manufacturing agreement where BioSteel will produce Flow’s portfolio of branded water at the Verona Facility in addition to the production of BioSteel-branded sports hydration drinks on site.
All active employees at the Verona Facility will become employees of BioSteel.
“The sale of the Verona production facility is a major milestone toward achieving profitable growth of the Flow brand,” said Nicholas Reichenbach, Flow founder and CEO. “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 organization. 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 U.S.”
BioSteel is growing at a record pace, with thousands of new points of distribution added since the beginning of the year, said Bruce Jacobson, BioSteel president.
“This acquisition allows us to unlock greater efficiency in our business as we achieve full vertical integration of our U.S. operations,” he said. “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 the next generation of athletes demands.”
The deal allows Flow to focus its investments on sales and marketing, accelerating the path toward profitable growth, said Flow, which maintains ownership of the 144-acre Virginia spring, securing local supply of naturally alkaline water from an artesian spring.
For BioSteel, the agreement supports its rapid growth strategy and expansion of U.S. footprint, Flow said.
Flow Beverage sells health- and wellness-oriented beverages online and at retailers throughout North America. Its premium alkaline spring water is offered in original as well as a range of flavors, in sizes ranging from 330 milliliters to 1 liter. Flow products contain naturally occurring electrolytes and essential minerals, and its original flavored water products have an alkaline pH, according to the company.
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