BURLINGTON, Mass. and FRISCO, Texas and AUSTIN, Texas, Dec. 8, 2022
/PRNewswire/ -- Keurig Dr Pepper Inc. (NASDAQ: KDP) and
Nutrabolt today announced a strategic partnership, including a
definitive agreement for a long-term sales and distribution
arrangement that leverages KDP's powerful go-to-market capabilities
and a significant equity investment that enables KDP to participate
in the value creation upside expected to be created through the
strategic partnership. The equity investment is expected to
close by year-end.
Nutrabolt is a rapidly growing, global active health and
wellness company with a portfolio of brands, including C4® Energy,
one of the fastest-growing performance energy drink brands in the
U.S.; C4® Pre-Workout, the leading pre-workout brand globally; and
XTEND®, the #1 post-workout recovery brand in the
U.S.
Under the long-term sales and distribution agreement, KDP will
sell and distribute C4® Energy in the vast majority of KDP's
company-owned direct store distribution territories, which is
expected to meaningfully increase retail availability and household
penetration for the brand. Nutrabolt will continue to
distribute C4® Energy directly or through its existing distribution
network to the specialty, health club and fitness channels and will
continue to work with some of its existing beverage distributors in
certain markets.
KDP will make a cash investment in Nutrabolt of $863 million, or approximately $740 million net of anticipated cash tax
benefits, in exchange for preferred equity with a 5% annual coupon
paid in cash or in-kind. The investment provides KDP with an
ownership stake of approximately 30%, making KDP the largest
investor in Nutrabolt behind its Founder, Chairman and CEO, Doss
Cunningham. Net of the anticipated cash tax benefits, the
investment represents a multiple below 4x estimated 2023 net sales,
which are expected to be above $650
million. KDP also has the opportunity to earn additional
equity tied to in-market execution and will have representation on
the Nutrabolt board. In addition, the partnership provides
KDP with rights to further increase its ownership stake under
various capital raising scenarios.
Commenting on the announcement, Chairman and CEO Bob Gamgort stated, "This partnership represents
a win-win transaction between our two companies. KDP gains
significant presence in the rapidly growing performance energy
drink market and Nutrabolt gains access to a strategic investor
with extensive sales and distribution capabilities to further
accelerate its growth. We believe that bringing together the
resources, talent and expertise of both companies will accelerate
innovation and growth and drive significant value creation over
time."
Cunningham said, "We are
extremely proud of this business and the team members who built it
from the ground up and, with the assets and experience that KDP
brings to the table, we are more confident than ever about the
direction of the company and our vision for the future. This
strategic partnership will supercharge C4 Energy's current growth
trajectory by accelerating household penetration, enhancing
distribution and strengthening our overall commercial capabilities.
We will also be partnering with a talented and ambitious
leadership team who shares our values, our competitive spirit and
has a similar philosophy of disciplined growth and maximizing
overall value creation."
"Over the past 20 years, Nutrabolt has grown from a bootstrap
startup to become one of the fastest growing global active health
and wellness companies in the world," Cunningham continued. "This is an amazing
moment for our company, and it is because of the incredible
contributions of our team members, commercial partners and those
who have financially backed us over the years, namely MidOcean
Partners, and CPG veterans and equity investors Brian Goldberg and Clayton Christopher."
The transition of C4® Energy distribution to KDP will occur
during 2023, which is expected to be a transition and investment
year, with limited impact on KDP financial results until 2024, when
KDP expects the strategic partnership to become accretive to its
financial results.
More information regarding the partnership will be discussed at
KDP's previously announced fireside chat on Dec. 15, 2022, at 2:30 p.m. (ET),
hosted by Equity Analyst Bryan Spillane with BofA
Securities.
Advisors on the deal for KDP included Evercore Group LLC,
Skadden, Arps, Slate and Meagher & Flom LLP. Jefferies
LLC and Goldman Sachs & Co LLC served as financial advisors to
Nutrabolt with Goodwin Procter LLP, Giannuzzi Lewendon LLP and
Kirkland & Ellis LLP serving as legal advisors.
KDP Contacts
Steve Alexander (Investors)
T: 972-673-6769 / steve.alexander@kdrp.com
Chethan Mallela (Investors)
T: 646-620-8761 / chethan.mallela@kdrp.com
Katie Gilroy (Media)
T: 781-418-3345 / katie.gilroy@kdrp.com
Nutrabolt Contacts
Brittany Cullison
bcullison@nutrabolt.com
About Keurig Dr Pepper
Keurig Dr Pepper (KDP) is a leading beverage company
in North America, with annual revenue approaching $13
billion and approximately 27,000 employees. KDP holds
leadership positions in soft drinks, specialty coffee and tea,
water, juice and juice drinks and mixers, and markets the #1 single
serve coffee brewing system in the U.S. and Canada. The
Company's portfolio of more than 125 owned, licensed and partner
brands is designed to satisfy virtually any consumer need, any
time, and includes Keurig®, Dr Pepper®, Green Mountain Coffee
Roasters®, Canada Dry®, Snapple®, Bai®, Mott's®, CORE® and The
Original Donut Shop®. Through its powerful sales and distribution
network, KDP can deliver its portfolio of hot and cold beverages to
nearly every point of purchase for consumers. The Company is
committed to sourcing, producing and distributing its beverages
responsibly through its Drink Well. Do Good. corporate
responsibility platform, including efforts around circular
packaging, efficient natural resource use and supply chain
sustainability. For more information,
visit www.keurigdrpepper.com.
About Nutrabolt
Nutrabolt is a fast-growing, global active health and wellness
company with a portfolio of market leading performance-oriented
brands that energize and fuel active lifestyles. The company's
disruptive and innovative products compete in the Functional
Beverage and Active Nutrition segments, under three consumer-loved
brands: C4® (one of the fastest-growing energy drink brands in
the United States and the #1
selling global pre-workout brand), XTEND® (the #1 post-workout
recovery brand in the United
States), and Cellucor® (an award-winning sports nutrition
brand created in 2002).
Since its founding 20 years ago, Nutrabolt has set out to meet
the discerning needs of performance athletes and fitness
enthusiasts, while appealing beyond this core group to include
consumers around the globe who are making healthy, active living a
daily priority.
Nutrabolt's portfolio, which is distributed in over 125
countries, is sold through company-owned DTC platforms, Amazon, and
other third-party e-commerce marketplaces, and is available at
leading retailers across the U.S., including Walmart, Target,
7-Eleven, Walgreens, Kroger, H-E-B, Wawa, Publix, GNC, and the
Vitamin Shoppe. For more information about Nutrabolt, please visit
www.nutrabolt.com.
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 expected future results of KDP's strategic partnership with
Nutrabolt, the anticipated benefits of the partnership (including
KDP's anticipated tax benefits), future impacts on KDP financial
results, 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 and subsequent filings with the SEC. KDP is
under no obligation to update, modify or withdraw any
forward-looking statements, except as required by applicable
law.
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SOURCE Keurig Dr Pepper Inc.; Nutrabolt