Keurig Dr Pepper to Add Energy Drink Business to Its Portfolio
FRISCO, Texas — Keurig Dr Pepper (KDP) entered into a definitive agreement to acquire GHOST Lifestyle and GHOST Beverages.
Founded in 2016, GHOST is a lifestyle sports nutrition business with a portfolio anchored by GHOST Energy, a ready-to-drink energy brand. According to the company, GHOST's net sales have more than quadrupled over the past three years, with GHOST Energy one of the fastest-growing brands in the energy category.
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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.
After the acquisition, GHOST will continue to be led by cofounders Dan Lourenco and Ryan Hughes, and will operate as part of KDP's U.S. Refreshment Beverages segment.
KDP believes the proposed transaction will substantially enhance its presence in the energy drink category. The company's current energy portfolio includes multiple brands spanning lifestyle, performance and other major occasions in the category, with GHOST's acquisition also adding a presence in supplements and emerging positions in other liquid refreshment beverages.
"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," said Tim Cofer, KDP's CEO. "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."
KDP plans to fully consolidate GHOST into its financial results upon close and expects the transaction to be neutral to modestly accretive to adjusted earnings-per-share 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.
In the second stage, 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.
Bank of America Securities served as financial advisor to KDP, with Cleary Gottlieb Steen & Hamilton acting as legal advisor. Morgan Stanley & Co. served as financial advisor to GHOST, with Winston & Strawn acting as legal advisor.
The transaction is subject to customary closing conditions, with the initial stage expected to close in late 2024 or early 2025.
Keurig Dr Pepper is a North American coffee and beverage company with annual revenue of approximately $15 billion. Its portfolio includes more than 125 owned, licensed and partner brands, including Keurig, Dr Pepper, Green Mountain Coffee Roasters, Canada Dry, Snapple, Bai, Mott's and The Original Donut Shop.