Keurig Dr Pepper Secures $7 Billion Investment from Private Equity Firms
Keurig Dr Pepper has successfully secured $7 billion in capital from private-equity firms to finance its $18 billion acquisition of JDE Peet’s. This funding comes as the beverage giant aims to address investor concerns regarding its plan to separate into two independent companies post-acquisition.
In a recent announcement, the company revealed that CFO Sudhanshu Priyadarshi, who was expected to take on the role of CEO for the planned coffee spinout, will no longer assume the position. Keurig Dr Pepper has initiated a search to fill this crucial leadership role.
CEO Tim Cofer stated that the company has carefully considered shareholder feedback and is taking decisive actions, including the new investment and a refreshed leadership structure. Cofer expressed confidence in the transaction’s ability to generate significant shareholder value and outlined robust plans for success.
The $7 billion investment was co-led by Apollo and KKR, with Goldman Sachs also participating. These firms will receive preferred stock in Keurig Dr Pepper, with the shares having a conversion price of $37.25 and paying an annual dividend.
Keurig Dr Pepper intends to utilize the funds to reduce its net leverage following the acquisition of JDE Peet’s, which is expected to close in the first half of 2026. Once the deal is finalized, the company plans to merge its coffee operations with JDE Peet’s and subsequently spin off the combined entity, creating the world’s largest pure-play coffee business.
This move will undo the 2018 transaction that merged Dr Pepper with Keurig Green Mountain, forming a diverse beverage conglomerate encompassing brands like Snapple, 7UP, and more.
The announcement of the private equity investment coincided with Keurig Dr Pepper’s release of its third-quarter earnings, which showcased a 10.7% year-over-year increase in net sales, reaching $4.3 billion. Both the coffee and beverage segments experienced growth during this period, with coffee sales up by 1.5% and beverage sales by 14.4%.
Overall, the latest funding and strategic decisions by Keurig Dr Pepper demonstrate the company’s commitment to delivering value to shareholders and positioning itself for sustained success in the competitive beverage market.
