Canadian wellness products portfolio company Simply Better Brands Corp. (SBBC) has reached an agreement to acquire Seattle-based craft beverage brand Jones Soda for nearly $99 million.
The two publicly traded companies this week entered a binding letter of intent, subject to shareholder approval, with a definitive agreement scheduled to be signed by June 30. According to the announcement, SBBC will purchase 100% of Jones’ issued and outstanding common stock at a value of $0.75 per share based on a price per SBBC share equal to $3.65. Upon completion of the deal, SBBC will change its name to Jones Soda or “some derivation thereof” and may choose a new trading symbol.
“Our growth model remains consistent: acquire and build emerging Gen Z and Millennial brands in the wellness space through category, channel and geographic expansion,” said SBBC CEO Kathy Casey in a press release. “We see joining forces with Jones as an incredible fit due to a common wellness mission, consumer cohort, and leadership approach.”
Based in Vancouver, SBBC’s portfolio also includes plant protein bar brand TRUBAR, CBD oil and gummies maker PureKana, and cosmetics line No B.S. The Jones acquisition will give the company an additional play in the cannabis category as the soda maker debuted its Mary Jones line of THC-infused edibles, sodas and syrups in California last month.
“We are very excited to be bringing together the two companies to further accelerate top line growth and bottom line improvements,” said Jones CEO Mark Murray in the release. “For Jones, this combination will deliver diversification to our core business. We are bringing together not only strong consumer brands but also two strong management teams that we believe will deliver growth and operational synergies.”
Upon closing, Murray and Jones Soda chairman Jamie Colbourne will join the combined company’s board of directors and Jones shares will be delisted from the Canadian Securities Exchange.
The acquisition comes amid a period of sustained growth for Jones Soda. According to the company’s 2021 earnings report, net revenue increased 24% to $14.8 million for the full year and gross profit as a percentage of revenue increased 720 basis points to 29.7%.
The long term improvement reflects a revamped strategy under Murray’s leadership; the former JGC Foods president was named CEO in late 2020 and began work on a three-year rebuilding plan that aimed to right the ship after the company faced months of declining sales. During his tenure Jones has rebuilt its sales infrastructure, updated its marketing strategy to focus on Gen Z consumers, built out its cannabis business and relaunched seasonal classic products such as its infamous Turkey & Gravy soda flavor.
In April 2019, cannabis investment firm SOL Global purchased a 9.8% stake in Jones, and in July 2019 its subsidiary, CBD portfolio company HeavenlyRx Ltd., acquired a 25% stake in the company. Earlier this year, Jones completed its acquisition of Canadian reporting issuer Pinestar Gold as part of its cannabis strategy, and as part of the deal raised $11 million in concurrent financing. The company began trading on the Canadian Securities Exchange in February.