Has Celsius made a mistake of 1.8 billion US dollars?

Although the shares have decreased by 63% compared to their climax, only a few companies took care of investors like Celsius (Nasdaq: Celh). The stocks have increased by 2,500%at five years. However, volatility remains the key topic.

This beverage style appeared by 27% on February 20 after the announcement Celsius will acquire Alani Nu. Then there were these winnings just to rise again in the past few weeks.

Large corporate offers like this can have big effects. The transaction certainly has merit. But did Celsius only make a mistake of 1.8 billion US dollars?

Alani Nu is a rapidly growing manufacturer of health -oriented and sugar -free drinks that have a large followers in younger women. Celsius agreed to pay $ 1.8 billion for the purchase of its smaller rival, which comprises $ 900 million in debt financing, a price of $ 375 million, EARN payments of $ 25 million and $ 500 million of newly issued shares.

The purchase price places a value on Alani Nu of less than three times in the last year or about 12 times EBITDA (after taking possible cost synergies). The deal is expected to be completed in the second quarter of this year.

Some clear factors made Alani Nu an attractive business goal for Celsius. An obvious is that it offers an important growth driver. In 2024, the retail turnover from Alani Nu rose by 64%, faster than any other energy drink brand and 22% profit far before Celsius. As a combined unit, the two can represent a significant part of the health and wellness corner of the Energy Drink market.

The acquisition also offers Celsius what fitness enthusiasts, a new customer group, could address. Alani Nu brings his strong customer base to the table from “younger, wealthy and female consumers”. In other words, the customers of the two brands can only overlap minimally, which supports incremental sales.

From a financial point of view, Celsius expects costs of 50 million US dollars. The deal should arrive for cash Win each share in the first year.

The reasons from the management team to buy Alani Nu certainly make sense. However, the shareholders should critically examine the decision. For such a large acquisition, it is important to try to understand whether the deal makes sense or will prove to be a strategic mistake.

For the beginning it is worth noting that the deal comes at a time when Celsius’ sales increases are under pressure. In 2024, the company recorded sales growth of 3%, an alarming slowdown compared to previous years. The acquisition could signal that organic growth becomes more difficult. The market share of Celsius in the fourth quarter of 10.9% in the fourth quarter of 12.3% in the first half of the last year.