US – Alkaline water company Flow Beverage Corp. has divested all the assets of its Verona production facility in Virginia state to BioSteel Sports Nutrition for US$19.5 million.
The purchase price comprised US$13.2 million in cash and US$6.3 million for the repayment of debt and the retirement of lease obligations.
All active employees at the Verona facility will become employees of BioSteel following a post-closing transition period, the companies said.
The deal will support the expansion of BioSteel’s footprint in the US, while “accelerating the path towards profitable growth of the Flow brand” by enabling it to focus its investments on sales and marketing.
To support Verona facility utilization, Flow and BioSteel have also entered into a co-manufacturing agreement whereby 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.
Nicholas Reichenbach, Founder and CEO of Flow, said: “The sale of the Verona production facility is a milestone towards achieving profitable growth of the Flow brand. 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 US.”
Bruce Jacobson, president of BioSteel, commented that BioSteel is growing at a record pace, with thousands of new points of distribution added since the beginning of the year and this acquisition allows us to unlock greater efficiency in the business as it achieves full vertical integration of the US operations.
He added that the agreement also supports the move toward the top of the sports drink category and having the ability to consistently supply premium ready-to-drink sports drinks packaged in environmentally friendly Tetra Paks.
Moreover, the packaging is a competitive advantage and supports the company’s consumers with the ‘Clean, Healthy Hydration’ that the next generation of athletes demands.
Flow Beverage Corp. Signs Distribution Agreement with Foodbuy
Meanwhile, Flow Beverage Corp has also signed a distribution agreement with Foodbuy Foodservice (Foodbuy), a division of Foodbuy, LLC – the largest food service procurement and supply chain solutions organization in North America.
In the agreement, Flow Alkaline Spring Water will become available to purchase in over 11,000 new points of distribution throughout the hospitality and leisure, food service and restaurant, gaming and casino, country club, healthcare, and education sectors.
For Flow, Reichenbach said this distribution agreement leverages Foodbuy’s extensive network of consumers in the United States that currently do not have access to Flow products and diversifies the company’s distribution capabilities with an organization that shares its vision and values.