Keurig Dr Pepper (KDP) and Nutrabolt have announced a strategic partnership, including an agreement for a long-term sales and distribution arrangement.
The deal includes an equity investment that will allow KDP to participate in the value creation upside expected to be generated by the partnership.
Nutrabolt has a portfolio of performance-oriented brands, including energy drink range C4 Energy, post-workout recovery brand, Xtend, and Cellucor.
Under the agreement, KDP will sell and distribute C4 Energy in the majority of its direct store distribution territories, which is expected to “meaningfully increase” the brand’s retail availability.
KDP says that it plans to make a cash investment in Nutrabolt of $863 million in exchange for preferred equity with a 5% annual coupon paid in cash or in-kind. The investment gives KDP an ownership stake of approximately 30%.
The deal provides an exit for private equity backer MidOcean Partners, which invested in Nutrabolt around eight years ago.
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.”
CEO of Nutrabolt, Doss 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”.
He continued: “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 that shares our values, our competitive spirit and has a similar philosophy of disciplined growth and maximising overall value creation.”
The equity investment is expected to close by the end of the year and the transition of C4 Energy distribution to KDP to occur during 2023.
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