Keurig Dr Pepper Inc. (KDP, Financial) has entered into a definitive agreement to acquire a controlling interest in GHOST Lifestyle LLC, a Delaware-based lifestyle and beverage company. This strategic acquisition, valued at approximately $990 million, is set to enhance Keurig Dr Pepper's portfolio by integrating GHOST Lifestyle's innovative beverage offerings.
The transaction involves a series of reorganization steps, including the merger of GHOST Beverages, LLC into GHOST Lifestyle. Upon completion, Keurig Dr Pepper will hold 60% of the equity interests in GHOST Lifestyle, while existing equity holders will retain a 40% stake. The acquisition is structured to include customary adjustments for net debt, transaction expenses, and working capital.
Key conditions for the closing of this transaction include regulatory approvals, the absence of legal injunctions, and the fulfillment of certain covenants and representations by both parties. Additionally, Keurig Dr Pepper has agreed to cover up to $250 million in termination fees related to a master distribution agreement, paving the way for a new distribution partnership with GHOST Lifestyle.
The agreement also outlines indemnification obligations and termination rights, including a reverse termination fee of $39.6 million under specific circumstances. Post-closing, a Second Amended and Restated Limited Liability Company Agreement will govern the management of GHOST Lifestyle, granting Keurig Dr Pepper significant control while providing limited rights to minority stakeholders.
To finance the acquisition, Keurig Dr Pepper anticipates utilizing a new term loan, although securing this financing is not a prerequisite for the transaction's completion. This acquisition marks a significant step for Keurig Dr Pepper in diversifying its beverage offerings and strengthening its market position.
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