Energy drink maker Monster this week announced plans to acquire its primary flavor supplier for $690 million.
Monster will also receive about $87 million in 2015 adjusted operating income as part of the deal with American Fruits & Flavors.
The partnership between Monster Beverage Corp. and AFF dates to the mid-1990s, but company officials said that the acquisition would secure the intellectual property behind many of Monster's key flavors in perpetuity.
Monster executives added that bringing AFF in-house would enable more profitable deployment in its international supply chain.
“This transaction provides Monster a unique opportunity to leverage new flavor technologies and differentiate ourselves from our largest competitors who do not have these capabilities," said Monster Chairman and CEO Rodney Sacks.
The move follows Coca-Cola's purchase of a minority stake in Monster last year for more than $2 billion. The soft drink giant hoped to capitalize on the fast-growing energy drink market despite ongoing concerns about their possible health effects.