Dr Pepper Snapple Group to acquire Bai Brands

PLANO, Texas, and HAMILTON, N.J. -- Dr Pepper Snapple Group is positioning itself to meet growing consumer demand for better-for-you beverages by agreeing to acquire Bai Brands and its portfolio of antioxidant infused beverages. 

DPSG says 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.

According to DPSG, Bai provides a strong platform to incubate and grow better-for-you beverages throughout the non-carbonated and carbonated beverage sectors. Bai is expected to generate approximately $425 million in net sales in 2017 and add an incremental $132 million to DPSG's current net sales expectation for 2017. 

"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."

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.

Bai will operate within the Packaged Beverages segment and continue to be led by founder Ben Weiss.

The transaction, which is subject to customary closing conditions, is expected to close in the first quarter of 2017.