PURCHASE, N.Y., Aug. 3, 2021 /PRNewswire/ -- PepsiCo,
Inc. (NASDAQ: PEP) today announced that it has entered into an
agreement with PAI Partners (PAI) to sell Tropicana, Naked and
other select juice brands across North
America, and an irrevocable option to sell certain juice
businesses in Europe, which will
result in combined pre-tax cash proceeds of approximately
$3.3 billion while retaining a 39%
non-controlling interest in a newly formed joint venture. PAI, a
leading private equity firm with strong experience in the food and
beverage space, will be the majority shareholder of the transferred
business, with PepsiCo retaining exclusive U.S. distribution rights
to the portfolio of brands in its best-in-class, chilled Direct
Store Delivery for small-format and foodservice channels.
"This joint venture with PAI enables us to realize significant
upfront value, whilst providing the focus and resources necessary
to drive additional long-term growth for these beloved brands,"
said PepsiCo Chairman and CEO Ramon
Laguarta. "In addition, it will free us to concentrate on
our current portfolio of diverse offerings, including growing our
portfolio of healthier snacks, zero-calorie beverages, and products
like SodaStream which are focused on being better for people and
the planet."
"We are delighted to bring these storied beverage brands into
the PAI portfolio through another partnership with a leading global
food and beverage company. We believe there is great growth
potential to be realized through investments in product innovation,
expansion into adjacent categories, and enhanced scale in branded
juice drinks and other chilled categories," said Frédéric Stévenin,
a Managing Partner at PAI. "We are also thrilled that PepsiCo will
remain involved as our partner in the joint venture as we execute
our plans to drive the future success of these brands."
These juice businesses delivered approximately $3 billion in net revenue in 2020 with operating
profit margins that were below PepsiCo's overall operating margin
in 2020. PepsiCo expects to use the proceeds from the sale of these
assets primarily to strengthen its balance sheet and to make
organic investments in the business. The transaction is expected to
close in late 2021 or early 2022, subject to customary conditions,
including works council consultations and regulatory approvals.
Centerview Partners LLC is acting as financial advisor to
PepsiCo. Gibson, Dunn & Crutcher LLP is acting as lead counsel
to PepsiCo, and Davis Polk &
Wardwell LLP as U.S. tax and antitrust counsel. J.P. Morgan
Securities LLC is acting as financial advisor to PAI. Willkie Farr & Gallagher LLP is serving as
legal counsel to PAI, and Latham & Watkins LLP is acting as
financing counsel.
About PAI Partners
PAI Partners is a pre-eminent private equity firm,
investing in market-leading companies across the globe. It has
significant experience in the food and beverage space and is
currently invested in Froneri, the world's #2 ice cream
manufacturer, and Ecotone, a leader in healthy and
sustainable food. It manages around €15 billion of
dedicated buyout funds and, since 1994, has completed 84
investments in 11 countries, representing over
€65 billion in transaction value. PAI has built an outstanding
track record through partnering with ambitious management teams
where its unique perspective,
unrivalled sector experience and long-term vision
enable companies to pursue their full potential - and
push beyond. Learn more about the PAI story, the team and
their approach at: www.paipartners.com.
About PepsiCo
PepsiCo products are enjoyed by consumers more than one billion
times a day in more than 200 countries and territories around the
world. PepsiCo generated more than $70
billion in net revenue in 2020, driven by a complementary
food and beverage portfolio that includes Frito-Lay, Gatorade,
Pepsi-Cola, Quaker, Tropicana and SodaStream. PepsiCo's product
portfolio includes a wide range of enjoyable foods and beverages,
including 23 brands that generate more than $1 billion each in estimated annual retail
sales.
Guiding PepsiCo is our vision to Be the Global Leader in
Convenient Foods and Beverages by Winning with Purpose. "Winning
with Purpose" reflects our ambition to win sustainably in the
marketplace and embed purpose into all aspects of our business
strategy and brands. For more information, visit
www.pepsico.com.
Cautionary Statement
This release contains statements that constitute
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements are generally identified through the inclusion of words
such as "aim," "anticipate," "believe," "drive," "estimate,"
"expect," "goal," "intend," "may," "plan," "project," "strategy,"
"target" and "will" or similar statements or variations of such
terms and other similar expressions. Forward-looking statements
inherently involve risks and uncertainties that could cause actual
results to differ materially from those predicted in such
statements, including the impact of COVID-19; future demand for
PepsiCo's products; damage to PepsiCo's reputation or brand image;
issues or concerns with respect to product quality and safety;
PepsiCo's ability to compete effectively; PepsiCo's ability to
attract, develop and maintain a highly skilled and diverse
workforce; water scarcity; changes in the retail landscape or in
sales to any key customer; disruption of PepsiCo's supply chain;
political or social conditions in the markets where PepsiCo's
products are made, manufactured, distributed or sold; PepsiCo's
ability to grow its business in developing and emerging markets;
changes in economic conditions in the countries in which PepsiCo
operates; future cyber incidents and other disruptions; failure to
successfully complete or manage strategic transactions; PepsiCo's
reliance on third-party service providers; climate change or
measures to address climate change; strikes or work stoppages;
failure to realize benefits from PepsiCo's productivity
initiatives; deterioration in estimates and underlying assumptions
regarding future performance that can result in an impairment
charge; fluctuations or other changes in exchange rates; any
downgrade or potential downgrade of PepsiCo's credit ratings;
imposition or proposed imposition of new or increased taxes aimed
at PepsiCo's products; imposition of limitations on the marketing
or sale of PepsiCo's products; changes in laws and regulations
related to the use or disposal of plastics or other packaging of
PepsiCo's products; failure to comply with personal data protection
and privacy laws; increase in income tax rates, changes in income
tax laws or disagreements with tax authorities; failure to
adequately protect PepsiCo's intellectual property rights or
infringement on intellectual property rights of others; failure to
comply with applicable laws and regulations; and potential
liabilities and costs from litigation, claims, legal or regulatory
proceedings, inquiries or investigations.
For additional information on these and other factors that could
cause PepsiCo's actual results to materially differ from those set
forth herein, please see PepsiCo's filings with the Securities and
Exchange Commission, including its most recent annual report on
Form 10-K and subsequent reports on Forms 10-Q and 8-K. Investors
are cautioned not to place undue reliance on any such
forward-looking statements, which speak only as of the date they
are made. PepsiCo undertakes no obligation to update any forward
looking statement, whether as a result of new information, future
events or otherwise.
Contacts:
For PepsiCo:
Carrie Ratner
carrie.ratner@pepsico.com
For PAI Partners:
Brian Ruby / Chris Gillick
ICR
pai@icrinc.com
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