Celsius' $1.8 Billion Alani Nu Deal: Analyst Highlights Enhanced Exposure To Female Consumers

Celsius Holdings Inc CELH reported better-than-expected fourth-quarter earnings and entered into an agreement to acquire Alani Nutrition for $1.8 billion.

The following are the analysts reaction to both the events.

Needham analyst Gerald Pascarelli reiterated a Buy rating on the shares and maintained a price forecast of $38.00.

The acquisition of the energy brand Alani Nu represents a revenue multiple of less than 3x for 2024. The transaction will be financed through a combination of $1.275 billion in cash and $500 million in stock (22.5 million shares), along with a potential $25 million earnout tied to 2025 performance, noted the analyst.

Strategically, the acquisition makes sense, as Alani is among the fastest-growing energy brands with significant distribution potential.

This move will offer CELH enhanced growth and scalability. After the acquisition, the combined company will hold a low-to-mid-teens market share in the U.S. energy sector, surpassing the previously difficult-to-achieve double-digit threshold.

Additionally, it will bolster the company’s appeal to female consumers, an area where CELH has historically had an advantage, given its roughly 50/50 demographic split, noted the analyst.

The analyst is optimistic about the Alani Nu acquisition and the stronger-than-expected earnings and anticipates that CELH shares will see significant rewards.

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B. Riley Securities analyst Jeff Van Sinderen reiterated a Buy rating on the shares and raised the price forecast from $44.00 to $49.00.

CELH reported its fourth-quarter results, surpassing expectations for sales, AEBITDA and EPS. North American sales fell 6%, while international sales rose 39%, partially due to PepsiCo Inc‘s efforts to optimize and balance inventory, said the analyst.

Competition in the energy drink sector remains fierce, with the top two rivals focused on increasing and retaining shelf space and market share amid a tougher consumer environment, the analyst observed.

The start of the first quarter has been slow, but the company is optimistic about retail activations, product innovation, and marketing plans to improve throughout the year.

Celsius aims to attract new customers to the energy category, expand product availability, and boost consumption frequency.

According to the analyst, the acquisition of Alani Nu is expected to close around the second quarter and will increase Celsius’s market share from approximately 11.8% to 16%.

The analyst views this acquisition positively as it positions the company for further growth and potential higher AEBITDA margins, similar to Monster Beverage’s high-20% margins in the future. Meanwhile, expanding internationally and continuing innovation in products and marketing will be crucial for the sustained growth of the Celsius brand, per the analyst.

Stifel analyst Mark S. Astrachan reiterated a Buy rating on the shares and maintained a price forecast of $37.00.

Celsius fourth-quarter results, exceeded consensus expectations for both sales and adjusted EBITDA. The company also revealed its acquisition of energy drink rival Alani Nu for $1.8 billion, which equates to a 21x TTM adjusted EBITDA multiple or 12x 2025E adjusted EBITDA, along with $25 million in synergies for the first year, noted the analyst.

The analyst estimates that the deal will boost Celsius’s sales and adjusted EBITDA by approximately 50% in 2026, assuming $50 million in run-rate synergies and a 28% average adjusted EBITDA growth in 2025-2026, in line with projected sales growth.

In the short term, the analyst is optimistic about the acquisition, as it provides significant upside for Alani’s sales growth due to enhanced distribution.

Over the long term, the analyst notes Celsius must focus on improving its core sales and market share trends, as integration challenges and the need to sustain strong sales growth and market share momentum, similar to the gains seen in 2024, will be crucial.

Price Action: CELH shares are trading lower by 0.55% at $32.44 in at the last check Monday.

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