Prime Drink Group has announced its intention to acquire Beach Day Every Day, a player in Québec's ready-to-drink beverage category.

The acquisition, outlined in a non-binding letter of intent, supports Prime's strategy to expand its portfolio with high-growth assets and work towards ambitious revenue goals.

Beach Day Every Day has established itself the ready-to-drink segment, reporting unaudited annual sales exceeding $30 million for the fiscal year ending 2023.

This acquisition not only positions Prime to capitalise on Beach Day's existing market presence in Québec but also opens avenues for expansion across Canada and into the US, where the market potential is approximately 30 times larger than that of Québec.

Olivier Primeau, founder and president of Prime Capital Investments and chief brand and innovation officer at Prime, commented: "The addition of Beach Day Every Day allows us to integrate a premium brand that aligns with our growth objectives. This move is expected to significantly contribute to our revenue streams and enhance our market position."

The transaction is valued at $22.5 million, comprising a cash payment of $12.5 million and an additional $10 million to be paid through the issuance of common shares at a deemed price of $0.25 each.

As part of this acquisition process, Prime will conduct due diligence and negotiate a definitive agreement by January 31 2025. The agreement will include conditions such as the completion of a concurrent financing round aimed at raising a minimum of $12.5 million to support the cash portion of the acquisition.

This financing is expected to involve the private placement of common shares and will be conducted under applicable Canadian securities regulations.

The transaction has raised interest in the broader beverage industry, particularly as consumer preferences continue to shift towards ready-to-drink options, a segment that has seen robust growth in recent years. Industry analysts suggest that brands like Beach Day Every Day, which capitalise on convenience and quality, are well-positioned to thrive in this evolving market landscape.

The acquisition is classified as a 'related party transaction' due to shared ownership among certain executives, prompting compliance with regulations designed to protect minority shareholders.

However, it is anticipated that the transaction will not trigger formal valuation requirements, given the scale of the deal relative to Prime's market capitalisation.

As Prime Drink Group targets an ambitious goal of reaching $100 million in annual revenues, this acquisition marks a pivotal step in its growth trajectory.

The integration of Beach Day Every Day is expected to enhance Prime's competitive edge in the beverage sector, reflecting a broader trend of consolidation in the industry as companies seek to diversify their offerings and expand market reach.

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