Keurig Dr Pepper to acquire 33% ownership of La Colombe for $300M

Keurig Dr Pepper and La Colombe announced a strategic partnership, including a long-term sales and distribution agreement for La Colombe ready-to-drink coffee and a long-term licensing, manufacturing and distribution agreement for La Colombe branded K-Cup coffee pods. Keurig Dr Pepper will also make an equity investment in La Colombe, enabling KDP to participate in the value creation upside expected from the partnership. La Colombe is an independent, high-growth, super premium coffee company that serves consumers across multiple channels, including the retail trade, branded cafes, foodservice and direct to consumer. Under the long-term sales and distribution agreement, KDP will sell and distribute shelf-stable La Colombe RTD coffee beverages in KDP’s direct store distribution network, which is expected to drive meaningful growth in the brand’s availability across these mainstream retail channels. In addition, KDP will manufacture, sell and distribute La Colombe branded K-Cup coffee pods, under a license agreement, in the U.S. and Canada. KDP will make a cash investment in La Colombe of $300M, in exchange for a 33% ownership stake in the company, making KDP the second largest investor in La Colombe behind its majority owner and Chairman, Hamdi Ulukaya. La Colombe plans to use the proceeds to accelerate growth and pay off debt. KDP’s investment in La Colombe represents a multiple of approximately 3.0X estimated 2024 consolidated net sales. The transition of La Colombe ready-to-drink coffee distribution to KDP will begin in late 2023, while the launch of La Colombe branded K-Cup pods will occur during 2024. The equity investment, which is subject to regulatory approval, is expected to close by the end of the Q3.