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ARIIX, NewAge Create Unified Partnership

ARIIX, NewAge Create Unified Partnership
ARIIX, NewAge Create Unified Partnership

August 12, 2020

A July agreement between ARIIX and NewAge, Inc., a publicly traded NASDAQ listed company, has the potential to create the only omni-channel company in direct selling with access to e-commerce and direct-to-consumer channels in more than 75 countries.

“We are very excited that these companies are coming together to create a powerful global enterprise with tremendous growth potential,” said NewAge CEO Brent Willis, who will be the CEO of the newly combined company. “We believe this partnership will be an industry game-changer, as we will have the team, the scale, the profitability, the brands and the reach to drive superior growth and return for shareholders and all of our valued independent Representatives and consultants worldwide.”

The Agreement

NewAge, who also acquired Morinda in late 2018 and now operates a direct-selling division Noni by NewAge, signed a definitive agreement on July 20 to merge with ARIIX—which was founded nine years ago by Dr. Fred Cooper and Mark Wilson—along with four additional companies (LIMU, MaVie, Zennoa and Shannen) that ARIIX acquired.

Consideration for the acquisition will consist of a combination of cash, common stock and convertible notes. At closing, NewAge will pay $25 million in cash and will issue 18 million shares of the company’s common stock. NewAge will also issue a convertible note for $10 million that matures six months from closing and a convertible note for $141.25 million that matures 24 months from closing. Closing of the transaction is expected to occur in the third quarter of 2020.

The combined entity expects to reach pro forma revenues of over $500 million, with a blended gross margin of approximately 70%, and adjusted EBITDA of more than $30 million for 2020. Once the transaction is completed, NewAge will have a network of over 400,000 independent product consultants (IPCs), Representatives and affiliates around the globe.

Shares of NewAge jumped more than 100 percent in after-hours trading after the company announced the merger.

A Unified Partnership

NewAge’s direct selling division, Noni by NewAge, will partner with ARIIX. Founded in 1996 as Tahitian Noni, it has a presence in more than 60 countries, with manufacturing operations in Tahiti, Germany, Japan, the US and China. Like ARIIX, it has headquarters in Utah.

According to Mark Wilson, ARIIX’s president who will now serve as worldwide group president for NewAge, partnering with other direct selling companies has always been part of the ARIIX business strategy to disrupt the industry.

“We took two companies of unique synergies and strengths to build a large-scale organization of unlimited opportunities,” said Wilson. “Over the last nine years, we have merged with over 15 different companies and utilized this strategy to grow and consolidate a very fragmented industry, resulting in strong, consistent growth for ARIIX. Now, together with NewAge, a newer, aggressive company that has a different outlook on how to build this public, omni-channel platform, we are further positioned for even greater growth. ARIIX is a disruptor, with its House of Brands strategy that offers a diversified product portfolio. We are creating a unified partnership, empowered by a family of cultures, that provides the very best opportunities for all of our Representatives, employees and shareholders worldwide.”

Wilson said that the companies will leverage resources in order to keep their momentum and maximize growth potential, including revenue synergies in the areas of cost of goods sold, manufacturing efficiencies and scale, operational redundancy, cross-pollination of brands, as well as market and channel expansion

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