Addition of fast-growing brand accelerates
KDP's portfolio evolution towards consumer-preferred spaces
Disciplined transaction creates win-win
alignment between GHOST and KDP
BURLINGTON, Mass., and FRISCO, Tex., and LAS VEGAS and CHICAGO, Oct. 24,
2024 /PRNewswire/ -- Keurig Dr Pepper (NASDAQ:
KDP) today announced that it has entered into a definitive
agreement to acquire GHOST Lifestyle LLC and GHOST Beverages
LLC (collectively "GHOST"). Founded in 2016, GHOST® is a lifestyle
sports nutrition business with a portfolio anchored by GHOST®
Energy, a leading ready-to-drink energy brand. GHOST's net sales
have more than quadrupled over the past three years, and GHOST
Energy is one of the fastest-growing brands in the energy category,
characterized by its unique identity, distinctive flavors and
packaging, and strong consumer appeal.
Under the terms of the agreement, KDP will initially purchase a
60% stake in GHOST, which will be followed by the acquisition of
the remaining 40% stake in 2028. The transaction is subject to
customary closing conditions, with the initial step expected to
close in late 2024 or early 2025. GHOST will continue to be led by
co-founders, Dan Lourenco and
Ryan Hughes, and will operate as
part of KDP's U.S. Refreshment Beverages segment.
The proposed transaction will substantially enhance KDP's
presence in the energy drink category, extending its reach to new
consumers. KDP's energy portfolio will now include multiple,
powerful brands spanning lifestyle, performance, and other major
occasions in the category. In addition to ready-to-drink energy,
GHOST also has a presence in supplements and emerging positions in
other liquid refreshment beverages.
Commenting on the announcement, Tim
Cofer, KDP Chief Executive Officer, stated, "GHOST is a
differentiated brand with significant growth potential, and we are
excited to partner with its founders to take the business to the
next level. This acquisition strengthens our position in the
attractive energy drink category, accelerating our portfolio
evolution toward consumer-preferred, growth-accretive spaces
through a disciplined deal structure."
Cofer continued, "The energy category is poised for continued
long-term growth, which KDP expects to increasingly capture through
our platform-based approach. KDP's portfolio of complementary
energy brands is aligned against distinctive consumer need states,
and, together, these offerings will unlock significant growth and
scale benefits across our entire DSD portfolio."
GHOST CEO and Co-Founder Dan
Lourenco added, "We could not be more excited to build the
future of GHOST together with KDP. As we thought about our
company's next chapter, KDP's track record of cultivating
disruptive brands, similar challenger mindset, and shared vision
for the energy category and beyond made it the right home for our
brand and team. We are excited to pair KDP's insights and
capabilities with our products and people and know that together we
will continue to scale and build GHOST towards our vision of a 100
year brand."
The Company will fully consolidate GHOST into its financial
results upon close and expects the transaction to be neutral to
modestly accretive to adjusted EPS starting in 2025. In the first
stage of the transaction, the Company will make an initial cash
investment of approximately $990
million in exchange for a 60% ownership stake in GHOST. Net
of anticipated cash tax benefits with a net present value of
approximately $140 million, the
enterprise valuation at this step represents an approximate 3x net
revenue multiple on a projected 2024 basis.
In the second stage of the transaction, KDP will purchase the
outstanding 40% stake in 2028 at a pre-negotiated valuation scale
that will reflect GHOST's 2027 financial performance. Starting in
mid-2025, KDP also expects to invest up to $250 million to transition GHOST Energy's
existing distribution agreements ahead of beginning to sell and
distribute the brand through the Company's direct store delivery
network.
KDP plans to discuss the acquisition in greater detail on its
third quarter 2024 results conference call to be held later this
morning, Thursday, October 24, at
8:00 a.m. (ET).
BofA Securities served as financial advisor to Keurig Dr Pepper,
with Cleary Gottlieb Steen &
Hamilton LLP acting as legal advisor. Morgan Stanley & Co. LLC
served as financial advisor to GHOST, with Winston & Strawn LLP
acting as legal advisor.
Investors:
Investor Relations
Keurig Dr Pepper
T: 888-340-5287 / IR@kdrp.com
Keurig Dr Pepper Media:
Katie Gilroy
Keurig Dr Pepper
T: 781-418-3345 / katie.gilroy@kdrp.com
GHOST Media:
Carissa Bass
Startr Co.
T : 909-263-8083 / cizquierdo@startrco.com
Jillian Kwasizur
Startr Co.
T: 909-263-8083 / jkwasizur@startrco.com
About Keurig Dr Pepper
Keurig Dr Pepper (Nasdaq: KDP)
is a leading beverage company in North
America, with a portfolio of more than 125 owned, licensed
and partner brands and powerful distribution capabilities to
provide a beverage for every need, anytime, anywhere. With annual
revenue of approximately $15 billion,
we hold leadership positions in beverage categories including soft
drinks, coffee, tea, water, juice and mixers, and have the #1
single serve coffee brewing system in the U.S. and Canada. Our innovative partnership model
builds emerging growth platforms in categories such as premium
coffee, energy, sports hydration and ready-to-drink coffee. Our
brands include Keurig®, Dr Pepper®, Canada Dry®, Mott's®, A&W®,
Snapple®, Peñafiel®, 7UP®, Green Mountain Coffee Roasters®,
Clamato®, Core Hydration® and The Original Donut Shop®. Driven by a
purpose to Drink Well. Do Good., our 28,000 employees aim to
enhance the experience of every beverage occasion and to make a
positive impact for people, communities and the planet. For more
information, visit www.keurigdrpepper.com and follow us on
LinkedIn.
About GHOST®
GHOST® is a lifestyle brand of sports nutrition products, energy
drinks, dietary supplements, and apparel. GHOST® is disrupting the
sports nutrition industry by creating a lifestyle movement that
includes transparent innovative products, global distribution,
immersive content, key influencer partnerships, and authentic
collaborations with many of the world's leading flavor brands,
including OREO®, Chips Ahoy!®, Sour Patch Kids®, Sonic® Drive-In,
Warheads®, Swedish Fish® and Welch's®. GHOST® also entered the food space
in 2024 with its launch of high-protein cereals. GHOST® products
can be found at GNC, ghostlifestyle.com, and select global
retailers in over 40 countries. For more information, visit
ghostlifestyle.com or connect with the brand on Instagram, X,
TikTok, or Twitch.
FORWARD-LOOKING STATEMENTS
Certain statements
contained herein are "forward-looking statements" within the
meaning of applicable securities laws and regulations. These
forward-looking statements can generally be identified by the use
of words such as "outlook," "guidance," "anticipate," "expect,"
"believe," "could," "estimate," "feel," "forecast," "intend,"
"may," "plan," "potential," "project," "should," "target," "will,"
"would," and similar words. Forward-looking statements by their
nature address matters that are, to different degrees, uncertain,
such as statements regarding the estimated or anticipated future
results following the proposed transactions with GHOST Lifestyle
LLC ("GHOST") and GHOST Beverages LLC, the anticipated benefits of
the proposed transactions, including estimated synergies, the
expected timing of completion of the proposed transactions and
related transactions and other statements that are not historical
facts. These statements are based on the current expectations of
KDP's management, are not predictions of actual performance, and
actual results may differ materially. Forward-looking statements
are subject to a number of risks and uncertainties, including the
factors disclosed in KDP's Annual Report on Form 10-K for the year
ending December 31, 2023 and
subsequent filings with the Securities and Exchange Commission. The
Company is under no obligation to update, modify or withdraw any
forward-looking statements, except as required by applicable
law.
These forward-looking statements are subject to a number of
risks and uncertainties regarding the proposed transactions and the
business of the Company, GHOST and its affiliates, and actual
results may differ materially. These risks and uncertainties
include, but are not limited to: (i) the ability of the parties to
successfully complete the proposed transactions on anticipated
terms and timing, including obtaining required regulatory approvals
and the satisfaction of other conditions to the completion of the
proposed transactions, (ii) the Company's access to significant
debt financing for the proposed transactions on a timely basis and
reasonable terms and the impact such significant additional debt
may have on the Company's ability to operate its business following
the proposed transactions, (iii) risks relating to the integration
of GHOST's operations, products and employees into KDP and its
subsidiaries and the possibility that the anticipated synergies and
other benefits of the proposed transactions will not be realized or
will not be realized within the expected timeframe and (iv) risks
relating to the businesses of KDP, GHOST and their subsidiaries and
the industries in which they operate and will operate following the
proposed transactions. While the list of factors presented here is
considered representative, no such list should be considered to be
a complete statement of all potential risks and uncertainties. Any
forward-looking statement made herein speaks only as of the date of
this document. KDP is not under any obligation to, and expressly
disclaims any obligation to, update or alter any forward-looking
statements, whether as a result of new information, subsequent
events or otherwise, except as required by applicable laws or
regulations.
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SOURCE Keurig Dr Pepper