Celsius(US:CELH) The Motley Foolยท2025-02-28 08:45Core Viewpoint - Celsius Holdings is positioning itself as a leader in the sugar-free energy drink market, especially following its acquisition of Alani Nu, which could significantly enhance its market share and revenue potential [2][4]. Group 1: Acquisition and Financials - The acquisition of Alani Nu is valued at $1.8 billion, or $1.65 billion when accounting for tax credits, with Alani Nu generating $595 million in annual revenue and $173 million in EBITDA [4]. - The EBITDA multiple for the acquisition is 9.5x, which is considered attractive by investors, contributing to a significant stock price increase [5]. - Celsius's stock experienced a 40% increase following the announcement of the Alani Nu acquisition, despite a 4% decline in its own revenue [1][5]. Group 2: Market Position and Growth Potential - The combined revenue of Celsius and Alani Nu is projected to reach around $2 billion, potentially capturing close to 20% market share in the U.S. energy drink market [2][9]. - Celsius aims to expand internationally, with a 39% year-over-year growth in international revenue, although it currently represents a small portion of total sales [6][7]. - The global energy drink market is valued at $90 billion, and there is a growing demand for sugar-free options, which Celsius and Alani Nu are well-positioned to meet [7]. Group 3: Future Outlook - The integration of Alani Nu is expected to take time, with profit margins initially low, but there is potential for margins to reach levels similar to Monster Beverage's 26.3% operating margin in the future [9][10]. - The enterprise value of Celsius, after accounting for debt and dilution from the acquisition, is estimated to be around $9 billion, suggesting the stock may be undervalued if margin expansion occurs [8][10]. - The overall growth trajectory for Celsius and Alani Nu is anticipated to be double-digit, driven by international expansion and market share gains [10][11].