Shares of Flow Beverage soared as the spring water company announced its foray into the alcoholic drinks market through a partnership with BeatBox Beverage. The deal involves manufacturing and packaging BeatBox’s line of Party Punch.
Share Price Surge
In morning trading, Flow Beverage’s shares experienced a remarkable 16% surge, currently trading at C$0.26. The company’s shares have seen a substantial increase of 37% since the beginning of this year.
A Lucrative Partnership
Flow Beverage revealed that the agreement with BeatBox includes a commitment from the latter to purchase certain minimum annual volumes. This commitment is expected to generate approximately CAD 115 million ($84.1 million) in revenue over the course of the five-year deal.
Production is scheduled to commence between May and July of next year. Additionally, the agreement stipulates a take-or-pay provision, which requires BeatBox to pay 85% of the difference between the minimum annual volume and the actual volume purchased during a twelve-month period.
Expanding Manufacturing Agreements
This recent collaboration with BeatBox follows Flow Beverage’s previous three-year manufacturing agreement with Joyburst Beverages. The deal with Joyburst involves an assured annual production of 15 million units of Joyburst Hydration-branded beverages, which will be manufactured at Flow’s Aurora, Ontario facility.