Expanding its footprint in the energy drink space, Keurig Dr Pepper has signed an agreement to acquire Ghost Lifestyle LLC and Ghost Beverages LLC. Under the terms of the agreement, KDP will initially purchase a 60% stake in Ghost — a transaction expected to close in late 2024 or early 2025 — and will acquire the remaining 40% stake in 2028.
Ghost will continue to be led by co-founders, Dan Lourenco and Ryan Hughes, and will operate as part of KDP's U.S. Refreshment Beverages segment. The lifestyle sports nutrition business was founded by Lourenco and Hughes in 2016 with a portfolio anchored by Ghost Energy, a ready-to-drink energy brand, before expanding into sports nutrition products, dietary supplements and apparel. The fast-growing brand’s net sales have more than quadrupled over the past three years.
KDP notes in a release that the proposed transaction will substantially enhance its presence in the energy drink category, extending its reach to new consumers. KDP's energy portfolio will now include multiple brands in the category.
"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," said Tim Cofer, KDP CEO in a release. "The energy category is poised for continued long-term growth, which KDP expects to increasingly capture through our platform-based approach."
Upon close, KDP will fully consolidate Ghost into its financial results and expects the transaction to be neutral to modestly accretive to adjusted EPS starting in 2025. In the first stage of the transaction, the company will invest approximately $990 million in exchange for a 60% ownership stake in Ghost. Net of anticipated cash tax benefits, with a net present value of approximately $140 million, the enterprise valuation at this stage represents an approximate 3x net revenue multiple on a projected 2024 basis.
In the second stage of the transaction, KDP will purchase the outstanding 40% stake in 2028 at a pre-negotiated valuation scale that will reflect Ghost's 2027 financial performance. Starting in mid-2025, KDP also expects to invest up to $250 million to transition Ghost Energy's existing distribution agreements before beginning to sell and distribute the brand through the company's direct store delivery network.
