M&A should 'play a role' in Vita Coco's growth: Co-founder

Shares of Vita Coco (COCO) are up more than 170% over the past 12 months. This week, the company reported mixed third quarter results, but raised its full year guidance. The Vita Coco Company Co-Founder and Executive Chairman Michael Kirban tells Yahoo Finance Live that the company has "all of the right economics... for a good-performing stock." When it comes to expanding the company via an acquisition, Kirban believes it could be in the cards, saying "we believe that this business has the foundation to be a large, healthy beverage platform," and that "over time, M&A should play a role" in the company's growth.

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Video Transcript

BRAD SMITH: What do you think investors want to see from this business and adding on to the shareholder appreciation and the value appreciation that's taken place over the past year?

MICHAEL KIRBAN: Yeah, thanks. No, I think the performance has been good. We are the seventh best performing stock-- seventh best performing IPO since 2021 in the entire stock market. We're the second best performing consumer IPO since 2020. And so the stock has done well. But what's really interesting, I think, that investors really like about the business and the model is we're growing incredibly fast, the growth is continuing, and the opportunity to make coconut water a household staple is being-- people are seeing it and it's really coming to fruition.

But we're doing all of that profitably. We've grown adjusted EBITDA from $20 million in 2022 to $60 million through Q3 of 2023 of this year. So we're able to grow profitably while generating significant cash. So we've got all of the right economics, I think, for a good performing stock, and we think that-- we believe that will continue well into the future, with branded Vita Coco growth continuing to grow the category and also continuing to grow within healthy beverages as we look at other opportunities within the healthy beverage market.

BRAD SMITH: Does that mean an acquisition in the future, Michael? You talked about this a little bit on the earnings call about some of those new opportunities potentially in acquire of complementary beverage brands.

MICHAEL KIRBAN: Yeah, I mean, we believe that this business has the foundation to be a large, healthy beverage platform. We're generating a lot of cash, and we think that over time M&A should play a role in our growth. You know, and we think that as we're looking at different opportunities, we're looking at M&A opportunities throughout beverage, things that we can add significant growth to and leverage our foundation that we've built to really make these businesses better and stronger and more profitable.