Keurig Dr Pepper has secured $7 billion in funding from private-equity firms to support its $18 billion acquisition of JDE Peet’s. This investment comes as the company addresses concerns from investors regarding its planned separation into two independent entities post-acquisition.
Additionally, Keurig Dr Pepper announced that CFO Sudhanshu Priyadarshi, who was set to lead the planned coffee division, will not be assuming the role. The company is now actively searching for a replacement.
CEO Tim Cofer stated on Monday that the company has carefully considered shareholder feedback and is taking decisive actions in response, including the new investment and a revamped leadership structure.
Cofer expressed confidence in the transaction’s ability to create significant shareholder value and emphasized the company’s strong plans for success. He will continue to lead Keurig Dr Pepper’s beverage division, which includes brands like Snapple and 7UP.
The recent investment was co-led by Apollo and KKR, along with participation from Goldman Sachs. These firms will receive preferred stock in Keurig Dr Pepper, featuring a conversion price of $37.25 and an annual dividend.
The funds raised will be used by Keurig Dr Pepper to reduce its net leverage post the acquisition of JDE Peet’s. The acquisition is scheduled to be finalized in the first half of 2026.
Upon completion of the deal, Keurig Dr Pepper intends to merge its coffee operations with JDE Peet’s and subsequently spin off the combined entity, establishing the world’s largest pure-play coffee company.
This move will reverse the 2018 merger that united Dr Pepper with Keurig Green Mountain, forming a diversified beverage conglomerate encompassing coffee, Bai, 7UP, Sunkist, and A&W.
Recent reports indicated that activist investor Starboard Value had acquired a stake in Keurig Dr Pepper amidst opposition to the proposed deal. Following the announcement, the company’s shares dropped more than 17% in the subsequent week.
The private equity infusion was announced on the same day as Keurig Dr Pepper’s third-quarter earnings release.
During this quarter, the company generated $4.3 billion in net sales, reflecting a 10.7% year-over-year growth. This growth was driven by increases in both the coffee and beverage segments, at 1.5% and 14.4% respectively.
Clarification: The headline of this article has been revised to better convey the essence of Keurig Dr Pepper’s recent financing.