NewAge, Inc. (OTC: NBEVQ) (the “Company”), the Utah-based direct-to-consumer (D2C) organic and healthy products company, today announced that its wholly-owned subsidiaries, NABC, Inc. and NABC Properties, LLC (together, “NABC”), have entered into a definitive agreement to sell the legacy direct store distribution (“DSD”) division to Legacy Distribution Group, a Colorado-based distribution company.
The transaction is expected to be completed in the fourth quarter of 2022, and closing will be subject to court approval in the Company’s pending bankruptcy case.
The Company believes the DSD business is one of the largest independent distributors in Colorado providing beverages and snacks to grocers, big box retailers and convenience stores. It has been serving the Colorado community for more than twenty years, providing what the Company believes to be best-in-class service to over 5,000 outlets, and has been involved in launching and growing some of the biggest brands in the industry.
NABC is not included in the Company’s and certain of its subsidiaries’ previously announced bankruptcy cases, and the DSD division continues to conduct its business independently of the NewAge entities currently in the bankruptcy process. The proposed sale is part of the Company’s overall effort to align its assets and focus the business on maximizing revenue and cash flow generation for its larger scale Direct/Social Selling division.
Legacy Distribution Group is a 100%-owned subsidiary of CBD Global Sciences Inc. (CSE: CBDN), an American multi-national consumer goods and manufacturing company headquartered in Denver, Colorado.
Ed Brennan, NewAge’s Chairman and Interim CEO commented, “Over the past several months, we have conducted a comprehensive strategic review of our company as we endeavor to simplify our business, scale our operations and position NewAge for sustained growth in the direct selling industry. DSD had humble beginnings and has grown to be one of the largest independent distributors in the country. This proposed sale offers what we believe to be an excellent outcome for stakeholders in the DSD business, including our employees and our customers. Legacy Distribution Group has a deep understanding of the industry and the market in which DSD operates, and we believe they will be able to provide strategic ownership of the business moving forward.”