US-based energy drink maker Celsius Holdings has acquired local contract manufacturer Big Beverages for $75m to bolster its “innovation and production capabilities”.  

The transaction was finalised last Friday (1 November).  

It provides Celsius with a 170,000 square-foot “modern” manufacturing and warehouse facility. 

The site is expected to offer Celsius “greater supply chain control, quicker innovation cycles and greater production flexibility.”   

Big Beverages, based in Charlotte, North Carolina, specialises in canned drinks contact manufacturing and has been a long-time co-packer for Celsius.  

The facility will continue to be primarily dedicated to the production of Celsius products.  

Under the terms of the agreement, Big Beverages' existing management team and workforce are expected to retain their roles.

Outlining the rationale behind the acquisition, Celsius said that vertically integrating a plant for its products will facilitate "incremental research and development" as well as opportunities for limited-time offer products, and a turnkey facility.

It added that the purchase also presents future expansion possibilities, with ability to increase capacity as the business scales.

The group also expects per-case savings and improved leverage and margins, along with a “solid” return on invested capital opportunity and potential for earnings per share accretion. 

Celsius chairman and CEO John Fieldly said: “We believe that this acquisition gives Celsius fantastic leverage to accelerate our product innovation and production capabilities so we can continue growing the energy drink category with our great tasting, functional and better-for-you performance energy drinks.  

“The experienced team and modern facilities at Big Beverages are best-in-class, and we are proud to continue working with these dedicated men and women to inspire even more consumers to live fit!” 

Big Beverages CEO Ryan Goff added: “The Big Beverages team has worked closely with Celsius for over four years, and we have always felt like we have been part of the Celsius family.  

“We are proud of what we have accomplished, and we are very excited to join the most exciting and best tasting energy drink brand in the world.”  

The acquisition comes at a time when Celsius is pursuing international expansion, with sales rising despite a weakened US consumer base and a slowdown in the energy category.  

Earlier in April, Celsius partnered with Suntory Beverage & Food to introduce its products in France.  

The sales and distribution agreement with Suntory's French division will initiate “initial targeted actions” towards the end of 2024, aiming for a “broad launch” in France in 2025. 

For the second quarter ending June 30, Celsius reported revenues of $402.4 million, reflecting a 23% year-on-year increase. 

The group's adjusted EBITDA for the period increased by 29%, reaching $100.4m.  

In the second quarter, the energy drinks major saw retail sales in the US rise by 36.5% year-on-year to $382.4m, while international sales reached $19.6m, reflecting a 30% increase from the previous year. 

Celsius is due to report its third-quarter results this Wednesday (6 November).