JPMorgan Reiterates Overweight Rating on Celsius Holdings (CELH)
JPMorgan analyst Andrea Teixeira reiterated an Overweight rating and $31.00 price target on Celsius Holdings (NASDAQ: CELH)
The analyst comments "CELH Entered Agreement to Acquire Alani Nu for $1.65B (Net of Tax Benefits) - Due to J.P. Morgan acting as financial advisor to Alani Nu, following comments are limited to factual information. CELH announced a definitive agreement to acquire Alani Nutrition (Alani Nu) for $1.8 billion, including $150M in tax assets, resulting in a net purchase price of $1.65 billion. Alani Nutrition generated 2024 revenue of $595M and EBITDA of $87M and CELH expects to achieve $50M in run-rate cost synergies over two-year post close. As such, company noted acquisition multiple is less than 3x revenue and approximately 12x fully synergized EBITDA of $137M. CELH expects the transaction to be accretive to cash EPS in the first full year of ownership. CELH plans to fund the deal with a mix of $1,275M in cash, $500M in stock , and potential $25M earn-out based on 2025 performance. The $500M in stock represents approximately 22.5M shares, or an 8.7% pro-forma ownership stake, and the release notes that there is a there is a lock-up agreement that will be released over a two-year period (per filing 33%/33%/34% on 12-, 18-, 24- month anniversary post-closing). The cash component is comprised of $900M debt and $375M cash on hand. The press release notes “Retail sales of Alani Nu in total U.S. MULO Plus with Convenience increased by 78% year over year as reported by Circana for the last-four-week period ended Jan. 26, 2025. Alani Nu dollar share for the same last-four-week-period was 4.8%, an increase of ~200 basis points from the prior-year period.” The deal is expected to close in 2Q25. Upon closing, Alani Nu will operate within Celsius, and key members of the Congo Brands leadership team have agreed to continue as advisors to Celsius."
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Shares of Celsius Holdings closed at $25.53 yesterday.