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PURCHASE, N.Y. – PepsiCo, Inc. (NASDAQ: PEP), with its impressive market capitalization of $181 billion, has completed the acquisition of the prebiotic soda brand poppi, a move that signifies the beverage giant’s continued shift towards products aligning with modern health trends. The deal, valued at $1.95 billion, includes anticipated cash tax benefits bringing the net purchase price to $1.65 billion, with additional performance-based earnouts contingent on future metrics. According to InvestingPro analysis, PepsiCo is currently trading below its Fair Value, suggesting potential upside opportunity.
poppi, known for its low-calorie sodas infused with prebiotics, fruit juice, and apple cider vinegar, has gained traction as a wellness-focused alternative in the soft drink industry. The brand has successfully engaged younger demographics, notably Gen Z and millennials, through vibrant marketing and social media campaigns.
The acquisition by PepsiCo is part of its broader strategy to diversify its portfolio with functional beverages and foods that cater to evolving consumer preferences. With impressive gross profit margins of 55% and annual revenue reaching $91.5 billion, PepsiCo continues to demonstrate strong financial fundamentals. poppi joins other recent PepsiCo acquisitions like Siete and Sabra in the company’s expanding lineup of health-conscious offerings. For detailed analysis of PepsiCo’s acquisition strategy and financial metrics, InvestingPro subscribers can access comprehensive research reports covering 1,400+ top stocks.
Ram Krishnan, CEO of PepsiCo Beverages U.S., commented on the acquisition, highlighting poppi’s strategic fit within the company’s vision for the future of beverages. poppi CEO Chris Hall expressed gratitude for the partnership with PepsiCo, anticipating further growth and community engagement.
PepsiCo’s robust portfolio includes a variety of globally recognized brands that collectively brought in nearly $92 billion in net revenue in 2024. The company operates under the vision of PepsiCo Positive (pep+), emphasizing sustainability and human capital in its business strategy. As a testament to its financial stability, PepsiCo has maintained dividend payments for 55 consecutive years, currently offering a dividend yield of 4.3%. InvestingPro data reveals 12 additional key insights about PepsiCo’s market position and growth potential.
Financial advising roles in the transaction were filled by Centerview Partners LLC and J.P. Morgan Securities LLC for PepsiCo, with legal advice provided by Cravath, Swaine & Moore LLP and tax counsel from Davis Polk & Wardwell LLP. poppi was advised by Goldman Sachs & Co. LLC and legal firm Cooley LLP.
The information in this article is based on a press release statement.
In other recent news, PepsiCo reported its first-quarter 2025 earnings, revealing a slight miss in earnings per share (EPS) at $1.48, compared to the forecast of $1.51. However, the company exceeded revenue expectations, bringing in $17.92 billion against the anticipated $17.78 billion. PepsiCo also announced a 5% increase in its quarterly dividend to $1.4225 per share, reflecting its ongoing commitment to shareholder value. Evercore ISI revised its stock price target for PepsiCo down to $140 from $155, citing challenges in the Frito-Lay North America segment and broader consumer pressures. Despite these hurdles, Evercore ISI noted that PepsiCo’s productivity initiatives could support earnings growth in 2026 and beyond. Additionally, PepsiCo adjusted its full-year guidance due to new tariffs and macroeconomic uncertainties, maintaining a focus on low single-digit revenue growth. The company emphasized its strategic focus on international markets as a key growth driver, despite a subdued performance in the Frito-Lay segment. These developments highlight both the challenges and strategic adjustments facing PepsiCo in the current economic climate.
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