PLANO, Texas, and HAMILTON, N.J., Nov.
22, 2016 /PRNewswire/ -- Dr Pepper Snapple Group, Inc.
(NYSE: DPS) today announced that it has reached an agreement to
acquire Bai Brands, LLC ("Bai" or the "Company"), and its complete
portfolio of high-growth premium antioxidant infused beverages. The
cash purchase price of $1.7 billion
includes a tax benefit of approximately $400
million on a net present value basis and will be financed
through new unsecured notes and short term commercial paper. We
expect to maintain our strong investment grade credit profile and
have no plans to change our existing shareholder dividends and
share repurchase distributions.
Bai provides a strong platform to incubate and grow
better-for-you beverages throughout the non-carbonated and
carbonated beverage sectors. It is expected to generate
approximately $425 million in net
sales in 2017 and add an incremental $132
million to our current net sales expectation for 2017. The
transaction is expected to be approximately $0.03 dilutive to reported diluted EPS in 2017
driven by planned increases in marketing investments behind the
brand and increased interest expense associated with the financing
of the purchase price. The transaction is expected to be accretive
to reported diluted EPS in 2018.
"We're excited to welcome Bai into our family of great brands,"
said Larry Young, DPS President and
CEO. "In a relatively short time, Bai has carved out a leadership
position in the enhanced water category and has now extended that
success into other fast-growing and profitable categories. We're
equally impressed with their innovation pipeline, which will
continue to meet the needs of consumers seeking great tasting,
low-calorie beverages with natural flavors and no artificial
sweeteners."
Young continued, "Bai has contributed greatly to our allied
brand lineup since we began distributing it broadly in 2013. Adding
it to the broad range of choices and options in our company-owned
portfolio is a natural next step. Moving forward, we will empower
Bai's management team to continue the breakthrough and disruptive
branding and innovation that have revolutionized their categories
and work with them to put the brand in front of more consumers in
more places."
Bai is one of the fastest growing beverage brands, offering a
family of premium better-for-you beverages. The Company's product
portfolio spans across several high-growth beverage categories
including enhanced water, carbonated flavored water, coconut water
and premium ready-to-drink teas. With its Bai, Bai Bubbles,
Cocofusion and other innovative brands, Bai is positioned for
expanding growth in key beverage segments. These highly profitable
categories are projected to continue to grow worldwide for the
foreseeable future. The acquisition of Bai will further enable us
to meet growing consumer demand for better-for-you beverages.
Bai will operate within the Packaged Beverages segment and
continue to be led by founder Ben
Weiss.
"Over the past seven years, Bai has proven to be an agent of
change in a marketplace that is rapidly evolving," said Weiss.
"We've worked tirelessly to challenge the notion that
better-for-you beverages can't taste good. On our journey, we found
a strong ally in DPS, an ally who embraced our mission to change
the way the world drinks. Now, it only makes sense to continue our
quest together. We are thrilled to join the DPS family and create a
new path forward with infinite possibilities."
The transaction, which is subject to customary closing
conditions, is expected to close in the first quarter of 2017. The
boards of both companies have approved the transaction.
Credit Suisse Securities (USA)
LLC is serving as exclusive financial advisor to Dr Pepper Snapple
Group and Morgan, Lewis & Bockius LLP is acting as legal
counsel. J.P. Morgan Securities LLC is serving as exclusive
financial advisor to Bai and Skadden, Arps, Slate, Meagher &
Flom LLP is acting as legal counsel.
Conference Call
At 7:30 a.m.
(CST) today, Dr Pepper Snapple Group will host a conference
call with investors to discuss the Bai acquisition. The conference
call and slide presentation will be accessible live through DPS's
website at http://www.drpeppersnapple.com and will be archived for
replay for a period of 14 days.
About Dr Pepper Snapple Group
Dr Pepper Snapple Group
(NYSE: DPS) is a leading producer of flavored beverages in
North America and the Caribbean. Our success is fueled by more than
50 brands that are synonymous with refreshment, fun and flavor. We
have six of the top 10 non-cola soft drinks, and 13 of our 14
leading brands are No. 1 or No. 2 in their flavor categories. In
addition to our flagship Dr Pepper and Snapple brands, our
portfolio includes 7UP, A&W, Canada Dry, Clamato, Crush,
Hawaiian Punch, Mott's, Mr & Mrs T mixers, Peñafiel, Rose's,
Schweppes, Squirt and Sunkist soda. To learn more about our iconic
brands and Plano, Texas-based
company, please visit www.DrPepperSnapple.com. For our latest news
and updates, follow us at www.Facebook.com/DrPepperSnapple or
www.Twitter.com/DrPepperSnapple.
About Bai
Bai is an innovative beverage company that
brings great taste and better ingredients together at last. Its Bai
and Bai Bubbles lines offer fresh fruit flavor and antioxidants
with no artificial sweeteners and only 5 calories and 1 gram of
sugar per serving. Bai also produces Antiwater, an
antioxidant-infused, super-purified bottled water. The company
was founded by 20-year beverage industry veteran Ben Weiss in 2009 and has grown rapidly with its
products now distributed by Dr Pepper Snapple Group among others.
Bai Brands was named one of Inc.'s 500 fastest-growing private
companies in 2014, as well as one of America's 20 Most Promising
Companies by Forbes in 2015. For more information, visit
www.drinkbai.com
Forward-Looking Statements
This release contains
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, including, in
particular, statements about future events, future financial
performance including earnings estimates, plans, strategies,
expectations, prospects, competitive environment, regulation, and
cost and availability of raw materials. Forward-looking statements
include all statements that are not historical facts and can be
identified by the use of forward-looking terminology such as the
words "may," "will," "expect," "anticipate," "believe," "estimate,"
"plan," "intend" or the negative of these terms or similar
expressions. These forward-looking statements have been based on
our current views with respect to future events and financial
performance. Our actual financial performance could differ
materially from those projected in the forward-looking statements
due to the inherent uncertainty of estimates, forecasts and
projections, and our financial performance may be better or worse
than anticipated. Given these uncertainties, you should not put
undue reliance on any forward-looking statements. All of the
forward-looking statements are qualified in their entirety by
reference to the factors discussed under "Risk Factors" in Part I,
Item 1A of our Annual Report on Form 10-K for the year ended
December 31, 2015, and our other
filings with the Securities and Exchange Commission.
Forward-looking statements represent our estimates and assumptions
only as of the date that they were made. We do not undertake any
duty to update the forward-looking statements, and the estimates
and assumptions associated with them, after the date of this
release, except to the extent required by applicable securities
laws.
Contacts:
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Media
Relations
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Chris Barnes, (972)
673-5539
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Investor
Relations
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Heather Catelotti,
(972) 673-5869
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SOURCE Dr Pepper Snapple Group, Inc.