Beverage producer Dr Pepper Snapple Group (DPS) agreed yesterday to acquire US-based antioxidant-infused beverage maker and portfolio company Bai Brands for $1.7bn.
Founded in 2007, Bai manufactures canned and bottled fruit-flavoured drinks under the Bai and Bai Bubbles brands, the latter of which for caffeinated drinks, as well as ready-to-drink teas and bottled waters.
The drinks are infused with antioxidants derived from the pulp of the coffeefruit, the centre of which is used for coffee itself. In addition to including no artificial sweeteners, the drinks reportedly contain five calories and 1 gram of sugar in each serving.
DPS paid $15m for a 3% stake in Bai in April 2015, 18 months after signing a distribution deal with the company. Bai generated about $50m in sales in 2014 but is aiming for $425m in net sales in 2017.
Larry Young, president and CEO of DPS, said: “Bai has contributed greatly to our allied brand line up 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 revolutionised their categories and work with them to put the brand in front of more consumers in more places.”
Bai will continue to be headed by founder Ben Weiss, and will join the Packaged Beverages segment of DPS.
The $1.7bn purchase price will include a tax benefit of approximately $400m on a net present value basis. The boards of both companies have approved the deal, which is expected to close in the first quarter of 2017.
– Image courtesy of Bai Brands, LLC