Beverage giant Keurig Dr Pepper is set to acquire energy drink manufacturer Ghost for over a billion dollars.
Ghost's assortment of energy drink flavors, teaming up with popular sweets like Sour Patch Kids and Oreo, positions Keurig to attract a younger demographic, the company declared in a press release on Thursday. Keurig CEO Tim Cofer mentioned during an earnings call on Thursday that the brand resonates with "GenZennials."
Cofer explained, "These beverages cater to a near-universal consumer desire for energy and alertness, which is increasingly crucial in a society with numerous time and attention obligations."
Ghost's revenue has quadrupled over the past three years, the firm stated in the press release.
This deal is the largest Keurig has endorsed since buying Dr Pepper Snapple Group for approximately $19 billion in 2018, as reported by the Wall Street Journal.
The deal also aligns with Keurig's expansion into energy, sports, and pre-made beverage sectors. The company initially invested in C4 Energy in 2022 before collaborating with Black Rifle Coffee Company this year to distribute their energy drinks.
Keurig Dr Pepper Inc. (KDP) will acquire Ghost in two installments, paying $990 million in cash for 60% of the company by early 2025, then purchasing the remaining share in 2028, according to the press release. The transaction includes Ghost's sports nutrition division and energy drink branch.
Ghost's co-founders, Dan Lourenco and Ryan Hughes, will continue to oversee operations, according to Keurig.
"As we pondered our company's next phase, KDP's history of fostering disruptive brands, comparable 'challenger' mindset, and shared vision for the energy sector and beyond, made it the ideal location for our brand and team," Lourenco shared.
This partnership with Ghost can potentially expand Keurig's business into the energy drink market, catering to the growing demand for such beverages. The acquisition also aligns with Keurig's strategy of investing in the energy, sports, and pre-made beverage sectors.
Keurig's acquisition of Ghost will not only boost its presence in the energy drink market but also expand its revenue streams, given Ghost's significant growth over the past few years.
