Jones Soda Intends Merger with Reed's; Jones CEO to Depart
Reed's Inc., maker of sodas in natural food stores nationwide, and Jones Soda Inc. announce that the two companies have entered into a Letter of Intent (LOI) regarding a merger, with Reed's as the surviving company. The combination would unite a number of leading premium soda brands, such as Reed's Ginger Brew, Virgil's and Jones Soda. The proposed merger would also provide the two companies with the opportunity to realize the potential benefits of increased size and scale, as well as cost efficiencies in several aspects of the combined business, including administration, operations and customer interface. The strength of the Reed's portfolio in the direct selling channel combined with Jones Soda's strong national distributor structure allows for future growth opportunities for each company's brands across these channels.
Rick Eiswirth, chairman of the board of Jones Soda Co., states, "Over the past year we have taken numerous steps to reduce our expenses and reinvigorate our top line in order to return to profitability. Unfortunately, the challenging economic environment combined with our current capitalization has made it extremely difficult to operate on a standalone basis. After evaluating a range of strategies aimed at improving our outlook, our Board of Directors determined that the proposed merger with Reed's offers our shareholders the most compelling long-term benefits of the available alternatives. We believe the combination of Jones and Reed's will create a substantially larger beverage business with a more powerful operating platform and a brighter future. We are especially pleased that the Jones shareholders will be able to participate in the potential upside of the combined business, as a meaningful portion of the consideration is in the form of Reed's stock."
The non-binding provisions of the LOI contemplate a merger transaction in which Reed's would acquire Jones Soda for a combination of cash and Reed's common stock.
Jones Soda also announced that Joth Ricci will be stepping down as chief executive officer effective April 2, 2010 in order to pursue other business opportunities. Joth Ricci comments, "I have truly enjoyed my time at Jones Soda and I'm pleased with the work our team has done to improve many aspects of our business. Unfortunately, due to the current market conditions, it has taken longer than anticipated to produce the necessary top line results to effectively return to profitability and stem our cash burn. However, I remain confident in the strength of the Jones Soda brand and believe the proposed merger with Reed's provides Jones Soda an improved platform from which to capitalize on its future prospects and is in the best interests of its shareholders."
Under the binding provisions of the LOI, Reed's and Jones Soda have until April 5, 2010 to negotiate a definitive agreement on an exclusive basis.
Rick Eiswirth, chairman of the board of Jones Soda Co., states, "Over the past year we have taken numerous steps to reduce our expenses and reinvigorate our top line in order to return to profitability. Unfortunately, the challenging economic environment combined with our current capitalization has made it extremely difficult to operate on a standalone basis. After evaluating a range of strategies aimed at improving our outlook, our Board of Directors determined that the proposed merger with Reed's offers our shareholders the most compelling long-term benefits of the available alternatives. We believe the combination of Jones and Reed's will create a substantially larger beverage business with a more powerful operating platform and a brighter future. We are especially pleased that the Jones shareholders will be able to participate in the potential upside of the combined business, as a meaningful portion of the consideration is in the form of Reed's stock."
The non-binding provisions of the LOI contemplate a merger transaction in which Reed's would acquire Jones Soda for a combination of cash and Reed's common stock.
Jones Soda also announced that Joth Ricci will be stepping down as chief executive officer effective April 2, 2010 in order to pursue other business opportunities. Joth Ricci comments, "I have truly enjoyed my time at Jones Soda and I'm pleased with the work our team has done to improve many aspects of our business. Unfortunately, due to the current market conditions, it has taken longer than anticipated to produce the necessary top line results to effectively return to profitability and stem our cash burn. However, I remain confident in the strength of the Jones Soda brand and believe the proposed merger with Reed's provides Jones Soda an improved platform from which to capitalize on its future prospects and is in the best interests of its shareholders."
Under the binding provisions of the LOI, Reed's and Jones Soda have until April 5, 2010 to negotiate a definitive agreement on an exclusive basis.