Keurig Dr Pepper Invests $300M In Coffee Roaster La Colombe - What's On The Cards?

Keurig Dr Pepper Inc KDP has signed a strategic partnership with La Colombe, an independent coffee roaster.

KDP will make a cash investment in La Colombe of $300 million, representing a multiple of about 3.0X estimated 2024 consolidated net sales, in exchange for a 33% ownership stake in the company.

The collaboration includes a long-term sales and distribution agreement for La Colombe ready-to-drink coffee and a long-term licensing, manufacturing and distribution agreement for La Colombe branded K-Cup coffee pods.

The investment will make KDP the second largest investor in La Colombe, behind its majority owner and Chairman, Hamdi Ulukaya.

KDP will sell and distribute shelf-stable La Colombe ready to drink (RTD) coffee beverages in KDP's direct store distribution network.

La Colombe serves consumers, including the retail trade, branded cafes, foodservice and direct to consumer.

"This partnership will enable KDP to expand its reach into high growth ready-to-drink and super premium coffee segments and will meaningfully increase La Colombe's availability to consumers."

La Colombe will use the proceeds to accelerate growth and pay off debt. 

Price Action: KDP shares are trading higher by 1.90% at $32.50 on the last check Thursday.