Keurig Dr Pepper announced that it has entered into a definitive agreement to acquire Ghost Lifestyle LLC and Ghost Beverages LLC.

According to KDP, Ghost was founded in 2016 and is a lifestyle sports nutrition business with a portfolio anchored by Ghost Energy, a ready-to-drink energy brand. Ghost's net sales have more than quadrupled over the past three years, and Ghost Energy is one of the fastest-growing brands in the energy category.

Under the terms of the agreement, KDP will initially purchase a 60% stake in Ghost, which will be followed by the acquisition of the remaining 40% stake in 2028. The initial step is expected to close in late 2024 or early 2025. KDP says that Ghost will continue to be led by co-founders Dan Lourenco and Ryan Hughes and will operate as part of KDP’s U.S. refreshment beverages segment.

“The proposed transaction will substantially enhance KDP's presence in the energy drink category, extending its reach to new consumers. KDP's energy portfolio will now include multiple, powerful brands spanning lifestyle, performance and other major occasions in the category. In addition to ready-to-drink energy, Ghost also has a presence in supplements and emerging positions in other liquid refreshment beverages,” said KDP.

In the first stage of the transaction, Keurig Dr Pepper will “make an initial cash investment of approximately $990 million in exchange for a 60% ownership stake in Ghost.”

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.”

Reuters notes that in 2022, PepsiCo paid $550 million for an 8.5% stake in energy-drink maker Celsius Holdings, while Keurig Dr Pepper acquired a 30% stake in Nutrabolt, the maker of C4 Energy, for $863 million.

According to the NACS State of the Industry Report® of 2023 Data, energy drinks accounted for 26.7% of the packaged beverages category.