US-based wellness and dietary supplement company Safety Shot has reached a deal to acquire Yerbaé Brands, a plant-based energy drinks company.
The companies signed a definitive arrangement agreement under which all common shares of Yerbaé will be exchanged for an aggregate of 20 million shares of Safety Shot common stock.
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This deal represents a basic equity value of $15.2m and an enterprise value of $19.7m, respectively, according to a statement.
Safety Shot shareholders will own approximately 75.8% of the combined business, while former Yerbaé shareholders will hold 24.2%.
Subject to necessary conditions and approvals, the transaction is anticipated to close in the second quarter of 2025.
Founded in 2017 by Todd and Karrie Gibson, Yerbaé specialises in energy drinks made from plant-based ingredients.
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By GlobalDataIn its 2023 fiscal year, the energy drinks maker generated approximately $12m in revenue.
Safety Shot sells a range of 4oz “alcohol reducer” shots which claim to be able to lower blood alcohol and reduce the negative impact of alcoholic drinks on the body. Its drinks also come in a stick pack format.
John Gulyas, Safety Shot chairman, anticipates that the acquisition of Yerbaé will serve as a “significant revenue catalyst” for the company, “on top of an expected revenue growth rate of 50% expected in Q4, versus Q3”.
Safety Shot CEO Jarrett Boon added that the deal is “bringing together the best of both worlds – Safety Shot’s expertise in wellness solutions and Yerbaé’s strength in plant-based beverages – to create a company with significant potential.”
The proposed agreement is expected to generate “significant cost synergies”, according to the statement, primarily through efficiencies in general and administrative expenses and the supply chain.
The business plans to leverage Yerbaé’s “strong” distribution network to enhance its market visibility.
The acquisition is also expected to “enhance” Safety Shot’ visibility and growth trajectory in the US and Canada.
Upon the deal closing, Safety Shot’s leadership team will remain in place while Yerbaé’s team will assume secondary management roles.
Shares of Yerbaé will also be delisted from the Toronto Stock Exchange Venture (TSXV).
Yerbaé CEO Todd Gibson said: “We believe that the transaction will provide us with access to new distribution channels, expanded marketing capabilities, and valuable synergies that will look to benefit both brands.”
Speaking to Just Drinks in September 2023, co-founder Todd Gibson said it planned to build up Yerbaé Brands with the idea of possibly selling it to a larger business.
At the time, he said the “very clear plan is to build this business for it to be an acquirable business by a reputable acquirer”.
He said: “There are nine different major companies, major potential acquirers that are out there. And none of them have a yerba-maté in their portfolio right now. That gives us an opportunity to stand out in that crowd.”
