Monster Moves into the Alcoholic Beverage Industry with Latest Acquisition

Monster Beverage Corporation (Nasdaq: MNST) will move into the alcoholic beverage industry with its acquisition of CANarchy Craft Brewery Collective LLC , a beer and spiked seltzer beverage company, in a deal announced January 13.

The $330 million cash deal will “bring the Cigar City (Jai Alai IPA and Florida Man IPA), Oskar Blues (Dales Pale Ale and Wild Basin Hard Seltzer), Deep Ellum (Dallas Blonde and Deep Ellum IPA), Perrin Brewing (Black Ale), Squatters (Hop Rising Double IPA and Juicy IPA) and Wasatch (Apricot Hefeweizen) brands to the Monster beverage portfolio.” Monster’s beverage portfolio currently includes energy drinks SUCH AS Monster Energy, Monster Energy Ultra, Java Monster and Monster Hydro, among others.

However, the deal does not include CANarchy’s standalone restaurants, according to the filings.

As noted in the filings, Monster’s organizational structure for its existing energy beverage business will not be changed. Meanwhile, CANarchy will act independently and keep its own organizational structure led by CANarchy’s current CEO Tony Short.

“This transaction provides us with a springboard from which to enter the alcoholic beverage sector,” Monster’s Vice Chairman and Co-Chief Executive Officer Hilton Schlosberg said in a press release. “The acquisition will provide us with a fully in-place infrastructure, including people, distribution and licenses, along with alcoholic beverage development expertise and manufacturing capabilities in this industry.”

“The team at CANarchy is thrilled to be joining Monster,” CANarchy’s Chief Executive Officer Tony Short said in a press release. “We look forward to capitalizing on the combined expertise of Monster and CANarchy to further strengthen our current alcoholic product offerings, expand our product portfolio to meet the ever-changing needs of our customers and to grow our business.”

The deal is expected to close in Q1 2022, subject to customary closing conditions and regulatory approval.

CANarchy’s legal advisor is Latham & Watkins LLP. Monster’s legal advisor is Jones Day and its financial advisor is Evercore.

Monster’s previous transactions include its acquisition of flavor supplier and long-time business partner American Fruits & Flavors for $690 million in 2016. Furthermore, in 2015, Monster and Coca-Cola closed on their previously announced $2 billion partnership, whereby Coca-Cola owns a stake in Monster, at the time of the announcement it was 16.7%.

Prior to the announcement, Monster’s stock was valued at $93.98 on January 12. When it was announced on January 13, its stock was valued at $94.37. More than a week later, on January 24, it was valued at $88.14.