FEMSA’s Envoy Solutions to acquire Next-Gen Supply Group, further expanding its footprint in the Northeast region of the United States

Rhea-AI Summary

Fomento Económico Mexicano (FMX) announced its subsidiary, Envoy Solutions, will acquire Next-Gen Supply Group, expanding its distribution network into Massachusetts and Connecticut. This strategic acquisition is part of FEMSA's plan to create a leading national distribution platform in the U.S. Next-Gen reported revenues exceeding US$ 90 million in the past twelve months. The deal is expected to finalize in Q4 2021, pending customary conditions.

Positive

• Acquisition of Next-Gen Supply Group enhances Envoy's presence in the Northeast.
• Next-Gen generated over US$ 90 million in revenues in the past year, indicating strong market potential.

Negative

• None.

MONTERREY, Mexico, Nov. 16, 2021 (GLOBE NEWSWIRE) -- Fomento Económico Mexicano, S.A.B. de C.V. (“FEMSA” or the “Company”) (NYSE: FMX; BMV: FEMSAUBD, FEMSAUB) announced today that Envoy Solutions, FEMSA’s specialized distribution subsidiary in the United States, reached an agreement to acquire Next-Gen Supply Group Inc., (“Next-Gen”), an independent specialized distribution company based in Mansfield, Massachusetts. Next-Gen will expand Envoy´s footprint in the Northeast by including Massachusetts and Connecticut. This transaction represents another important step in FEMSA’s strategic path to build a leading national distribution platform in the United States. Revenues of the acquired business for the last twelve months as of October 2021, were over US$ 90 million.

The transaction is subject to customary closing conditions and approvals and is expected to close during the fourth quarter of 2021.

BDO USA LLP acted as financial and tax advisor, and Munger, Tolles & Olson LLP acted as external legal counsel for FEMSA in connection with this transaction. Capstone Partners acted as exclusive financial advisor to Next-Gen Supply Group.

About FEMSA
FEMSA is a company that creates economic and social value through companies and institutions and strives to be the best employer and neighbor to the communities in which it operates. It participates in the retail industry through FEMSA Comercio, comprising a Proximity Division operating OXXO, a small-format store chain, a Health Division, which includes drugstores and related activities, and a Fuel Division, which operates the OXXO Gas chain of retail service stations. In the beverage industry, it participates through Coca-Cola FEMSA, the largest franchise bottler of Coca-Cola products in the world by volume; and in the beer industry, as the second largest shareholder of Heineken, one of the world’s leading brewers with operations in over 70 countries. FEMSA also participates in the logistics and distribution industry through its Strategic Business Unit, which additionally provides point-of-sale refrigeration and plastic solutions to its business units and third-party clients. Across its business units, FEMSA has more than 320,000 employees in 13 countries. FEMSA is a member of the Dow Jones Sustainability MILA Pacific Alliance, the FTSE4Good Emerging Index and the Mexican Stock Exchange Sustainability Index, among other indexes that evaluate its sustainability performance.

FAQ

What is the purpose of FEMSA acquiring Next-Gen Supply Group?

The acquisition aims to expand Envoy Solutions' distribution network in the Northeast U.S.

What is the expected revenue from Next-Gen Supply Group?

Next-Gen is projected to contribute over US$ 90 million in revenue based on the last twelve months.

When is the FEMSA and Next-Gen acquisition expected to close?

The transaction is anticipated to close in the fourth quarter of 2021, pending customary approvals.

What are the strategic benefits of this acquisition for FEMSA?

This acquisition strengthens FEMSA's efforts to build a robust national distribution platform in the U.S.