PepsiCo to sell Tropicana and Naked juice brands for $3.3bn
PepsiCo has announced it will sell a controlling stake in its Tropicana and Naked juice brands to private equity firm PAI Partners for $3.3bn.
PepsiCo will retain a 39 per cent non-controlling interest in a newly formed joint venture while French firm PAI PAI will be the majority shareholder of the transferred business.
PepsiCo will retain exclusive U.S. distribution rights to the brands in its best-in-class, chilled Direct Store Delivery for small-format and foodservice channels.
The juice brands delivered approximately $3bn in net revenue in 2020 with operating profit margins that were below PepsiCo’s overall operating margin in 2020.
Proceeds from the sale will be used to strengthen its balance sheet and for organic investments, PepsiCo said.
The beverage producer said the sale would allow it to focus on the growth of its portfolio of healthy snacks and zero-calorie beverages, as well as products like Sodastream.
“This joint venture with PAI enables us to realize significant upfront value, whilst providing the focus and resources necessary to drive additional long-term growth for these beloved brands,” said PepsiCo chairman and CEO Ramon Laguarta.
“We believe there is great growth potential to be realized through investments in product innovation, expansion into adjacent categories, and enhanced scale in branded juice drinks and other chilled categories,” added Frédéric Stévenin, a managing partner at PAI.
The transaction is expected to close in late 2021 or early 2022, subject to customary conditions.