Keurig Dr Pepper (KDP) has announced a definitive agreement to acquire Ghost Lifestyle and Ghost Beverages, marking a significant move into the fast-growing energy drink sector.

The transaction, valued at approximately $990 million, will initially see KDP acquire a 60% stake in Ghost, with plans to purchase the remaining 40% by 2028.

Founded in 2016, Ghost has rapidly established itself as a prominent player in the energy drink market, particularly with its flagship product, Ghost Energy.

The brand has seen its net sales quadruple over the past three years, driven by its unique branding, distinctive flavours and strong consumer engagement. Ghost Energy is recognised as one of the fastest-growing brands in the energy category, appealing particularly to younger consumers.

Tim Cofer, CEO of KDP, said: "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. 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."

Cofer continued: "The energy category is poised for continued long-term growth, which KDP expects to increasingly capture through our platform-based approach. 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 across our entire DSD portfolio."

Under the terms of the agreement, Ghost will remain under the leadership of co-founders Dan Lourenco and Ryan Hughes and will operate within KDP's US Refreshment Beverages segment. The acquisition will leverage KDP’s existing distribution capabilities to enhance Ghost’s market reach.

The first stage of the transaction is set to close in late 2024 or early 2025, pending customary closing conditions. KDP plans to consolidate Ghost’s financial results upon completion and anticipates that the acquisition will be neutral to modestly accretive to adjusted earnings per share starting in 2025.

In addition to the initial investment, KDP has earmarked up to $250 million to transition Ghost Energy’s distribution agreements, allowing for integration into KDP's direct store delivery network. This move is expected to streamline operations and expand Ghost's market penetration.

The energy drink category has become increasingly competitive, with consumers seeking innovative and functional beverages. KDP’s acquisition of Ghost is seen as a strategic response to these market dynamics, positioning the company to capture a larger share of this lucrative segment.

KDP will provide further insights into the acquisition during its third-quarter 2024 results conference call, scheduled for later today.

Top image: © Ghost Beverages

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