Level 5 Beverage acquires majority stake in Avanzar Sales and Distribution
Acquisition will increase Avanzar’s distribution footprint in Southern California and the Southwest
Level 5 Beverage Co. Inc., a Houston, Texas-based subsidiary of Minerco Resources Inc., acquired a controlling interest in Avanzar Sales and Distribution LLC, Brea, Calif. Level 5 manufactures VitaminFizz sparkling enhanced waters as well as Level 5- and Coffee Boost-branded dietary supplements. Avanzar is a full-service broker and distributor of more than 20 brands, including VitaminFizz and Pulse Beverage Co.’s Cabana Natural Lemonades and Coconut Waters. The company covers the Southern California retail marketplace and currently services more than 3,200 locations.
Under the terms of the deal, Level 5’s structured payments of $500,000 yield Level 5 an irrevocable majority voting interest of 51 percent and an initial 30 percent equity percentage. The use of proceeds is to be deployed entirely and solely to expand Avanzar’s distribution business and not to be paid to Avanzar shareholders, the companies note. Level 5 also has the option to purchase an additional 21 percent equity stake at a fixed price and another option to purchase up to 75 percent of the total equity of Avanzar at a fixed multiple of revenues.
“These are very exciting times for Minerco and Level 5,” said V. Scott Vanis, Minerco chairman and chief executive officer, in a statement. “This acquisition broadens our base in the beverage industry through vertical integration and immediately strengthens our asset valuation and top-line revenues. The Avanzar team has a very forward-looking focus in the beverage industry, which makes Avanzar a prime candidate for rapid growth. We openly welcome Avanzar’s President Mr. Bill Juarez and his top-notch team to our family and look forward to expanding nationwide together.”
Juarez will continue his role as president of Avanzar, and his entire staff will remain unchanged, the company notes. The investment portends an expansion of Avanzar’s resources to increase its distribution footprint within Southern California and the Southwest region. With the support of Level 5 and VitaminFizz, expansion outside of the region is planned for 2015 with preliminary expansion targets already identified and/or currently in negotiations, they add.
In fiscal-year 2013, Avanzar generated annual sales of approximately $2.6 million. The company’s projected revenue for fiscal-year 2014 is approximately $2.7 million. Avanzar employs 19 full-time staff and has a fleet of 10 trucks, including refrigerated trucks. With the support of Level 5, Avanzar’s gross revenues are projected to reach $5.5 million in 2015 with continued exponential growth in 2016.
"We are thrilled about the prospects for this new partnership with Level 5 and the expansion opportunities that are now possible,” Juarez said in a statement. “Level 5 has demonstrated an ability to exceed expectations this past year as they developed and launched VitaminFizz, and we look forward to capitalizing on our combined strength in the market."