Keurig Dr Pepper announced Thursday morning that it will buy energy drink brand Ghost for more than $1 billion.
Ghost has seen its sales multiply by more than four times in the past three years.
It has become one of the fastest-growing energy drink brands in the health and wellness market and is sold at convenience stores such as Walgreens and CVS Pharmacy and major grocery stores like Publix and Walmart.
Keurig Dr Pepper says it will start by buying 60 percent of Ghost with plans to acquire the remaining 40 percent by 2028. The acquisition, which involves an initial $990 million investment is scheduled to be finalized by late 2024 or early 2025. KDP also plans to invest up to $250 million starting in mid-2025 to support the distribution of Ghost Energy through its network.
The acquisition will strengthen KDP's position in the energy drink sector. This market includes bottled water, ready-to-drink, coffee and tea, fruit beverages, energy drinks and sports beverages.
Keurig CEO Tim Cofer, KDP's CEO says Ghost's unique identity and growth potential align with his company's strategy of expanding in consumer-preferred categories.
While the energy drink market is a niche player in the beverage industry, Confer said it is set for long-term growth.
"The energy category is poised for continued long-term growth, which KDP expects to increasingly capture through our platform-based approach," Cofer said. "KDP's portfolio of complementary energy brands is aligned against distinctive consumer need states, and, together, these offerings will unlock significant growth and scale benefits."
Ghost founders Dan Lourenco and Ryan Hughes will continue to lead the company after the acquisition, according to the companies.
The acquisition allows Keuring Dr Pepper to diversify its portfolio, which already includes a range of energy and lifestyle brands.
In addition to energy drinks, Ghost also produces supplements and has started venturing into other beverage categories.
"Ghost is a differentiated brand with significant growth potential, and we are excited to partner with its founders to take the business to the next level," Cofer said. "This acquisition strengthens our position in the attractive energy drink category, accelerating our portfolio evolution toward consumer-preferred, growth-accretive spaces through a disciplined deal structure."
More details of the acquisition were expected to be released after KDP's third-quarter earnings call scheduled for Thursday.
