Keurig Dr Pepper, the Texas-based beverage behemoth, announced Friday that it has agreed to acquire the sports energy drink and lifestyle brand Ghost.
Under the deal KDP will pay $990 million in cash for a 60 percent stake in Ghost Lifestyle and Ghost Beverages, with purchase of the remaining 40 percent to follow in 2028. The Ghost brand will operate as part of KDP’s U.S. Refreshment Beverages segment, but will continue to be run by Ghost co-founders, Dan Lourenco and Ryan Hughes.
Founded by Lourenco and Hughes as a muscle building supplement company in Chicago in 2016, the Ghost whey and other basic supplements were co-marketed with popular licensed taste profiles like Oreo, Sonic and Sour Patch Kids.
Using the same formula, Ghost expanded into caffeine-based energy drinks in 2020 in a joint venture with Anheuser Busch’s AB InBev, and now sells vitamins and energy snack foods marketing to such specific lifestyle needs as bodybuilding, weight-management, wellness, even gaming. With the motto “be seen” and headquarters in Burlington, Mass., Frisco, Tex. and Las Vegas, Ghost brand marketing features apparel, accessories and tie-ins with popular events and social media influencers.
BofA Securities served as financial advisor to KDP with Cleary Gottlieb Steen & Hamilton as legal advisor.
Morgan Stanley served as financial advisor to Ghost, with Winston & Strawn acting as legal advisor. Neither firm has identified the lawyers involved.
At KDP, the deal was led internally by assistant general counsel Mark Jackson and senior corporate counsel Maria Hopper. Other KDP attorneys playing a role, include: AGC Lisa Dalfonso, corporate counsel Jamie Friesen, AGC Alana Sharenow, AGC Lauren Mutti and corporate counsel Bret Clark.
In the announcement KDP CEO Tim Cofer said, “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. 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.”
KDP says Ghost will be fully consolidated into its financial statements upon close and expects the transaction to be neutral to modestly accretive to EPS starting in 2025.
Net of anticipated cash tax benefits with a net present value of approximately $140 million, the enterprise valuation at this step 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 ahead of its sale and distribution through the company’s direct store delivery network.