Searching for a sweetener: drink maker Nexba pitches PE for funds

Sarah Thompson, Anthony Macdonald and Tim Boyd

Jun 21, 2020

AFR

There’s nothing wary investors respect more than when a deal that’s brought to them isn’t sugar coated.

And that rings particularly true for Aussie sugar-free soft drink maker Nexba, which is on the hunt for a growth equity partner with the help of investment bank Houlihan Lokey.

Street Talk understands Nexba is looking to raise $50 million to turbocharge its European expansion and for working capital, in return for a minority stake in the business.

It is understood Nexba’s adviser Houlihan Lokey has got its team Down Under working on the offer in conjunction with their London colleagues and they have been pitching the deal to private equity outfits and family offices in the UK and Australia.

The fresh funds would be used to capitalise on Nexba’s European growth opportunity, as well as for general working capital requirements.

The company entered the UK market in 2018, after signing a deal that saw some of its drinks stocked in more than 500 Sainsbury’s stores. Earlier this year, Nexba officially launched its some of its sugar free drinks in another UK retailer’s stores, WHSmith.

It is understood this $50 million cash injection would be used to finance things like marketing and sales functions to further raise brand awareness and drive sales growth in the UK. Nexba’s plan is to use the UK as a launch pad to enter other markets in Europe.

Sources said the company was looking for an investor to be a growth partner and provide mentorship to Nexba co-founders Troy Douglas and Drew Bilbe.

Nexba makes a range of sugar-free drinks, including kombucha, tonic water, sparkling water and fermented Mexican drink Tepache. The company was started in 2010 out of the northern Sydney suburb of Hornsby.

In Australia, its drinks are stocked at retailers Woolworths, Coles, 7-Eleven, and Aldi, among others.

Nexba last raised money in late 2018, early 2019, when it tapped the market for $6 million to help the business become cash flow positive and accelerate its international expansion.

Tipping into that round were the likes of former David Jones CEO Paul Zahra and former head of the private banking for the Commonwealth Bank of Australia Adrian Hondros.