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Celsius Holdings has announced its decision to acquire Alani Nutrition for a total consideration of $1.8 billion, including $150 million in tax assets. This acquisition is poised to reshape the landscape of the functional energy drink market, particularly as consumer demand for healthier, low-sugar alternatives continues to rise.

The net purchase price of $1.65 billion translates to an attractive valuation of less than three times Alani Nu’s projected 2024 revenue of $595 million and approximately 12 times its fully synergiaed EBITDA of $137 million. The transaction is expected to be accretive to cash earnings per share in the first full year post-acquisition, highlighting its financial viability.

Founded in 2018, Alani Nu has quickly carved out a niche in the wellness-focused beverage market, appealing primarily to Gen Z and millennial consumers with its range of functional drinks and wellness products. The brand's commitment to delivering low-calorie, aspirational products aligns well with evolving consumer preferences, particularly among female demographics.

The acquisition is expected to create a leading platform in the better-for-you functional lifestyle category, capitalising on the growing consumer trend towards premium, sugar-free beverages. According to industry projections, the global energy drink market is anticipated to grow at a compound annual growth rate of 10% from 2024 to 2029, indicating robust opportunities for both brands.

Celsius aims to leverage Alani Nu’s established presence and brand loyalty to drive incremental growth in the energy drink segment. Retail sales for Alani Nu surged by 78% year-over-year in the latest reporting period, reflecting the brand’s strong market traction and potential for further expansion under Celsius’s broader distribution capabilities.

Upon completion of the transaction, Alani Nu will operate under the Celsius umbrella, with key leadership from Alani Nu remaining involved to ensure a smooth transition and sustained momentum. This integration is expected to enhance Celsius’s portfolio, allowing for greater innovation and brand awareness while addressing the increasing demand for functional beverages.

Celsius’s CEO John Fieldly said: “Celsius is at a defining moment in the better-for-you, functional lifestyle products movement, and we are thrilled to welcome Alani Nu to the Celsius family. We have deep respect for the strong community of supporters and fans Alani Nu has developed and the authentic brand and partnerships they have formed."

He continued: "Together, we expect to broaden the availability of Alani Nu’s functional products to help more people achieve their wellness goals with great-tasting, functional product options at more moments throughout their lives”.

The acquisition is structured with a mix of cash and stock, including a potential $25 million earn-out based on Alani Nu’s performance in 2025. Celsius plans to fund the cash portion through a combination of debt financing and existing cash reserves, maintaining a robust liquidity position with a pro forma net leverage ratio of approximately 1.0x.

Katy Schneider, co-founder of Alani Nu, added: “When we founded Alani Nu in 2018, our goal was simple: to create products that made women feel their absolute best – inside and out. Watching this brand grow into a movement of strong, confident women has been the honor of a lifetime. As Alani Nu enters this next chapter with Celsius, I have full confidence that they are the best partner to enhance Alani Nu's growth and success while staying true to what makes it so special."

"I’m incredibly proud of everything we’ve built and beyond grateful for this amazing community who made it all possible. I’m thrilled for Alani to reach new heights.”