Organic and health-related products manufacturing company Newage Inc (NASDAQ:NBEV) has been in focus in the markets over the past month. In this period, the stock has rallied strongly and gained as much as 65% as investors piled on to it. Considering the hefty gains made by the NewAge stock in recent weeks, it would be remiss if investors did not take a closer look at the company.
Back on October 9, the company announced that in order to keep its growth trajectory going, NewAge decided to expand its operations in Brazil. It is a significant development for NewAge and was one of the triggers for the recent rally.
In this regard, it is also important to note that NewAge sells its products through e-commerce, direct sales, and traditional retail in as many as 75 countries following the ARIIX merger. NewAge pointed out that the expansion to Brazil came about as one of the synergies from the aforementioned merger.
More importantly, the company announced that as far as the direct sale is concerned, Brazil is the sixth biggest market in the world. The country boasts of as many as 3.8 million independent sales persons and annual sales currently stand at $10 billion.
NewAge set up its operations and an office in the Brazilian city of Sao Paulo back in the second quarter. Now, it is going to expand its operations in order to take advantage of the market opportunity.
ARIIX Merger Completion
One of the most important developments for NewAge in recent times has been the agreement with regards to the ARIIX acquisition. Earlier in October, the company announced that it expected the transaction to be completed by the end of November.
The acquisition is going to be made in both cash and stock. The company is going to pay ARIIX cash to the tune of $20 million and on top of that, as many as 19 million shares of NewAge common stock are also going to be issued.
On the other hand, if the move to issued 19 million shares does not get approval from shareholders, New Age is going to complete the transaction through a total payment of around $141 million.
In this regard, it is also necessary to point out that acquisition is going to further boost the range of products that are going to be on offer. ARIIX owns as many as five different wellness brands that are sold through direct sales and e-commerce channels.
Neither PSN nor its owners, members, officers, directors, partners, consultants, nor anyone involved in the publication of this website, is a registered investment adviser or broker-dealer or associated person with a registered investment adviser or broker-dealer and none of the foregoing make any recommendation that the purchase or sale of securities of any company profiled in the PSN website is suitable or advisable for any person or that an investment or transaction in such securities will be profitable. The information contained in the PSN website is not intended to be, and shall not constitute, an offer to sell nor the solicitation of any offer to buy any security. The information presented in the PSN website is provided for informational purposes only and is not to be treated as advice or a recommendation to make any specific investment. Please consult with an independent investment adviser and qualified investment professional before making an investment decision.