Keurig Dr Pepper (KDP), Burlington, Mass., and Frisco, Texas, announced that it has entered into a definitive agreement to acquire GHOST Lifestyle LLC and GHOST Beverages LLC (collectively GHOST). 

Founded in 2016, GHOST is a lifestyle sports nutrition business with a portfolio anchored by GHOST Energy, a leading ready-to-drink energy brand. GHOST’s net sales have more than quadrupled during the past three years, and GHOST Energy is one of the fastest-growing brands in the energy category, characterized by its unique identity, distinctive flavors and packaging, and strong consumer appeal, the company notes.  

Under the terms of the agreement, KDP will initially purchase a 60% stake in GHOST, which will be followed by the acquisition of the remaining 40% stake in 2028. The transaction is subject to customary closing conditions, with the initial step expected to close in late 2024 or early 2025. 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 proposed transaction will substantially enhance KDP’s presence in the energy drink category, extending its reach to new consumers. KDP’s energy portfolio will now include multiple, powerful brands spanning lifestyle, performance, and other major occasions in the category. In addition to ready-to-drink energy, GHOST also has a presence in supplements and emerging positions in other liquid refreshment beverages. 

Commenting on the announcement, Tim Cofer, KDP CEO, stated: “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.  

“The energy category is poised for continued long-term growth, which KDP expects to increasingly capture through our platform-based approach,” Cofer continued. “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.”

GHOST CEO and Co-Founder Dan Lourenco added: “We could not be more excited to build the future of GHOST together with KDP. As we thought about our company’s next chapter, KDP’s track record of cultivating disruptive brands, similar challenger mindset, and shared vision for the energy category and beyond made it the right home for our brand and team. We are excited to pair KDP’s insights and capabilities with our products and people and know that together we will continue to scale and build GHOST toward our vision of a 100 year brand.”

The company will fully consolidate GHOST into its financial results upon close 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 make an initial cash investment of 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 step represents an approximate three times 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 ahead of beginning to sell and distribute the brand through the company’s direct store delivery network.

KDP discussed the acquisition in greater detail on its third quarter 2024 results conference call to be held at 8 a.m. CT on Thursday, Oct. 24. 

BofA Securities served as financial adviser to Keurig Dr Pepper, with Cleary Gottlieb Steen & Hamilton LLP acting as legal adviser. Morgan Stanley & Co. LLC served as financial adviser to GHOST, with Winston & Strawn LLP acting as legal adviser.