Monster Beverage Corporation To Acquire American Fruits & Flavors

Monster Beverage Corporation announced that it has entered into a definitive agreement to acquire flavor supplier and long-time business partner, American Fruits & Flavors ("AFF"), in a transaction that will bring Monster's primary flavor supplier in-house, secure the intellectual property of Monster's most important flavors in perpetuity and further enhance its flavor development and global flavor footprint capabilities.

Pursuant to the terms of the transaction, Monster will purchase AFF for $ 690 million. Upon closing the transaction, Monster will acquire approximately $ 87 million of adjusted operating income for the twelve months ended December 31, 2015. The transaction, which is expected to close in the first quarter of 2016, is subject to customary closing conditions.

The acquisition brings Monster's primary flavor supplier in-house and secures Monster's ownership of the unique intellectual property created with AFF for its flagship Monster Energy® energy drinks as well as several other key flavors in its beverage portfolio.

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. AFF has grown at an approximately 8 % organic revenue CAGR over the last four years, with Monster as its largest customer, representing approximately 87 % of AFF's revenues in 2015. As a result of their highly integrated and close historical working relationship, the companies expect a seamless integration.

The acquisition is expected to be accretive to Monster's earnings during 2016.

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