NEW YORK - Tilray (TSX:TLRY) (NASDAQ:TLRY) Brands, Inc. (NASDAQ:TLRY; TSX:TLRY), a global lifestyle and consumer packaged goods company, has announced a definitive agreement to acquire four craft breweries from Molson Coors (NYSE:TAP) Beverage Company (NYSE:TAP).
The acquisition includes Hop Valley Brewing Company, Terrapin Beer Co., Revolver Brewing, and Atwater Brewery. This move is expected to grow Tilray's new beer accounts by 30% and cement its position as a leading craft brewer in the Pacific Northwest, Georgia, and key markets Texas and Michigan.
The transaction is part of Tilray's strategic growth plan and is anticipated to drive revenue, generate cost synergies, and expand national distribution. Irwin D. Simon, Chairman and CEO of Tilray Brands, expressed confidence in the company's ability to integrate these brands effectively and to deliver value for shareholders through profitable growth.
Molson Coors' Chief Commercial Officer, Michelle St. Jacques, indicated that the sale aligns with their strategy to focus on high-growth segments in their portfolio. The divestiture allows Molson Coors to concentrate on premiumizing their portfolio.
Ty Gilmore, President of Tilray Beverages, North America, highlighted the expected growth to 15 million cases annually, and mentioned plans to leverage product innovation and distribution expertise to enhance the sales and operations of the acquired brands.
Hop Valley Brewing Company, based in Oregon, is known for its Pacific Northwest-inspired beers and has approximately 43,000 points of distribution. Georgia's Terrapin Beer Company is recognized for its unique brewing techniques and has about 47,000 points of distribution. Texas-based Revolver Brewing, with around 12,000 points of distribution, and Michigan's Atwater Brewery, with approximately 10,000 points of distribution, are also part of the acquisition.
InvestingPro Insights
In light of the recent acquisition by Tilray Brands from Molson Coors Beverage Company, key financial metrics from InvestingPro provide a snapshot of Molson Coors' (NYSE:TAP) current market position. As of the last twelve months leading up to Q2 2024, Molson Coors has a market capitalization of $10.96 billion and a Price/Earnings (P/E) ratio of 10.59, which suggests that the company's shares might be trading at a reasonable valuation relative to earnings. The adjusted P/E ratio for the same period stands at an even lower 8.57, potentially indicating an attractive entry point for investors considering the stock's earnings potential.
Dividend investors might take interest in Molson Coors' consistent performance, as the company has raised its dividend for 3 consecutive years, with a dividend yield of 3.38% as of June 2024. This consistent increase in dividends, alongside a strong free cash flow yield implied by the valuation, underscores the company's commitment to returning value to shareholders. Additionally, the company has maintained dividend payments for an impressive 50 consecutive years, which is a testament to its financial stability and reliability as an income-generating investment.
InvestingPro Tips also highlight that management has been actively engaged in share buybacks, which can often signal confidence in the company's future prospects and a commitment to enhancing shareholder value. While analysts have revised their earnings expectations downwards for the upcoming period, the company's profitability over the last twelve months and predictions that it will remain profitable this year provide a balanced perspective on its performance outlook.
For those seeking more in-depth analysis, InvestingPro offers additional insights and tips on Molson Coors, which can be accessed through the dedicated InvestingPro platform for the company at https://www.investing.com/pro/TAP. There are currently 14 additional InvestingPro Tips available, providing a comprehensive understanding of the company's financial health and future potential.
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