Keurig Dr Pepper affiliated entity to purchase $20M in Vita Coco inventory as a part of IPO

Dive Transient:

  • An entity affiliated with Keurig Dr Pepper plans to buy $20 million in shares of Vita Coco on the firm’s IPO value from an current shareholder, Verlinvest Drinks, as a part of a personal placement, in keeping with an up to date S-1 submitting with the Securities and Alternate Fee.
  • Vita Coco, which is anticipated to go public subsequent week, mentioned within the submitting it will provide 11.5 million shares at between $18 to $21. At $19.50, the mid-point of that vary, the Keurig Dr Pepper entity would personal multiple million shares.
  • Keurig Dr Pepper and Vita Coco have labored intently collectively, with the soda, tea, water and occasional big serving as Vita Coco’s largest distributor buyer.

Dive Perception:

Vita Coco is transferring a step nearer towards its IPO, and its presence as a public firm may quickly have a detailed companion taking a stake as a part of the journey.

The corporate, whose portfolio contains its namesake coconut drink in addition to plant-based power model Runa, purified water Ever & Ever packaged in aluminum bottles, and protein-infused water Pwr Carry, is reportedly looking for a valuation of $1.17 billion at a $21 IPO value.

Vita Coco, which has been working with Keurig Dr Pepper for years, is closely depending on the beverage big. In line with the SEC submitting, Keurig Dr Pepper accounted for 19% of Vita Coco’s whole web gross sales in 2020.

The up to date S-1 submitting didn’t establish the investor besides to notice that it was “an entity affiliated with Keurig Dr Pepper.” An funding by this entity might be a worthwhile vote of confidence for Vita Coco as its shares start buying and selling on the NASDAQ.

With the historical past between the 2 firms, Keurig Dr Pepper is undoubtedly aware of Vita Coco and the way its manufacturers are performing within the U.S. market. It is unlikely that if the group with ties to Keurig Dr Pepper had doubts about Vita Coco’s future, or believed the IPO was overvaluing the corporate, it will decide to purchase the shares from an current shareholder. If it wished to speculate, it may wait till later.

Regardless that Keurig Dr Pepper has lengthy been identified for its house espresso platform and sodas like its namesake smooth drink and 7UP, it has been turning to acquisitions to construct up its beverage portfolio. In recent times, it bought the vast majority of Bai Manufacturers it did not already personal for $1.7 billion and premium water model Core Diet for $525 million. 

Keurig Dr Pepper has benefited financially by distributing Vita Coco’s manufacturers amid an upswing in demand for better-for-you drinks. Whereas little is thought in regards to the investor’s ties to Keurig Dr Pepper, it is attainable the beverage big may in the end determine to buy Vita Coco if it continues to see sturdy gross sales within the firm’s manufacturers and stays optimistic about its future.

Vita Coco had web gross sales of $334 million for the 12 months ending June 30, a 17% improve from the identical interval a 12 months earlier, the SEC submitting confirmed. The New York-based firm additionally posted web revenue of $33 million in 2020 in comparison with $9 million in 2019. 

Keurig Dr Pepper CEO Bob Gamgort advised Bloomberg not too long ago that his firm, shaped in a 2018 merger, is offers value as much as $20 billion. Keurig Dr Pepper is looking for “move-the-needle however not bet-the-company sort offers” in classes reminiscent of power and alcoholic drinks, Gamgort advised the wire service.

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