Last updated on October 5th, 2018 at 12:55 pm
Keurig Dr Pepper (KDP) will acquire Core Nutrition LLC, maker of enhanced waters. The acquisition will be funded with KDP common stock, and the transaction is expected to close by the end of 2018.
The deal is valued at $525 million, or approximately $435 million net of anticipated tax benefits.
Founded in 2015, Core Nutrition’s portfolio includes Core Hydration, a nutrient-enhanced bottled water, and Core Organic, a USDA-certified organic fruit-infused beverage.
Core has been a KDP allied brand since 2016, with KDP currently managing approximately two-thirds of the brand’s U.S. distribution. Net sales of all Core beverages has grown at an average annualized rate of approximately 115 percent for the past three years, with current retail sales across both measured and unmeasured channels estimated in excess of $200 million in the latest 52 weeks, according to the companies.
KDP CEO Bob Gamgort said, “Core has been a valued and successful allied brand partner, and we are pleased that this on-trend beverage will become part of our owned KDP family of brands. Our sales and distribution capabilities have helped fuel significant growth for the Core portfolio. Through this transaction we intend to realize the full growth potential for the business.”
Core founder Lance Collins added, “We created Core to meet the increasing desires for innovative, enhanced water offerings with functional benefits for today’s modern consumer. KDP has been an outstanding partner for Core, and I am certain that, under its ownership, Core will continue to see tremendous long-term success. I am a strong supporter of the KDP strategy and business model and am looking forward to being a shareholder in the company.”
The transaction is subject to customary closing conditions and is expected to close by the end of 2018. Following the closing of the acquisition, Core Hydration and Core Organic will continue to be distributed primarily through KDP’s company-owned, direct-store delivery (DSD) network and independent distributor network, while certain select existing Core Nutrition distribution partners are expected to maintain its channel coverage.
With an annual revenue in excess of $11 billion, KDP produces and distributes soft drinks, specialty coffee and tea, water, juice and juice drinks and mixers. The company has 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. It employs more than 25,000 people and operates more than 120 offices, manufacturing plants, warehouses and distribution centers across North America.
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