Keurig Dr Pepper, Nutrabolt announce strategic partnership

Keurig Dr Pepper and Nutrabolt announced a strategic partnership, including a definitive agreement for a long-term sales and distribution arrangement that leverages KDP‘s powerful go-to-market capabilities and a significant equity investment that enables KDP to participate in the value creation upside expected to be created through the strategic partnership. The equity investment is expected to close by year-end. Nutrabolt is a rapidly growing, global active health and wellness company with a portfolio of brands, including C4 Energy, one of the fastest-growing performance energy drink brands in the U.S.; C4 Pre-Workout, the leading pre-workout brand globally; and XTEND, the #1 post-workout recovery brand in the U.S. Under the long-term sales and distribution agreement, KDP will sell and distribute C4 Energy in the vast majority of KDP’s company-owned direct store distribution territories, which is expected to meaningfully increase retail availability and household penetration for the brand. Nutrabolt will continue to distribute C4 Energy directly or through its existing distribution network to the specialty, health club and fitness channels and will continue to work with some of its existing beverage distributors in certain markets. KDP will make a cash investment in Nutrabolt of $863M, or approximately $740M net of anticipated cash tax benefits, in exchange for preferred equity with a 5% annual coupon paid in cash or in-kind. The investment provides KDP with an ownership stake of approximately 30%, making KDP the largest investor in Nutrabolt behind its Founder, Chairman and CEO, Doss Cunningham. Net of the anticipated cash tax benefits, the investment represents a multiple below 4x estimated 2023 net sales, which are expected to be above $650M. KDP also has the opportunity to earn additional equity tied to in-market execution and will have representation on the Nutrabolt board. In addition, the partnership provides KDP with rights to further increase its ownership stake under various capital raising scenarios.