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PepsiCo Bets on Healthy, Eco-friendly With SodaStream Buy

PepsiCo Bets on Healthy, Eco-friendly With SodaStream Buy

PepsiCo chief executive Indra Nooyi, who is stepping down following 12 years at the helm, characterised the purchase of Tel Aviv-based SodaStream as consistent with the U.S. company's sustainability push, which involves pledges on producing healthier goods, boosting water-use efficiency and reducing waste.

Pepsi will buy SodaStream for $3.2 billion, the company announced Monday. The offer represents an 11% premium to the Friday closing price of SodaStream's USA -listed stock and is 32% higher than the company's 30-day volume weighted average price.

Adam Epstein, co-founder of Teleios Capital, a top-10 SodaStream shareholder, said the company's focus on its core product and disciplined approach had started to pay off in recent quarters with "a rapidly growing installed base of loyal users and transformational improvement in operating performance".

PepsiCo CEO Indra Nooyi, who's led the business for 12 years, announced earlier this month that she'd step down, having led a push away from sugar-based drinks and healthier options. The transaction will be funded with PepsiCo's cash on hand. "That focus is well-aligned with 'Performance with objective, ' our philosophy of making more nutritious products while limiting our environmental footprint". In 2014, PepsiCo tested sales of homemade brands through the Israeli company's system.

SodaStream produces machines that allow people to make fizzy drinks in their own homes and has positioned itself as a provider of a healthy product in contrast to traditional sugary, carbonated drinks.

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"Together, we can advance our shared vision of a healthier, more-sustainable planet", she said.

"I am excited our team will have access to PepsiCo's vast capabilities and resources to take us to the next level". "This is great news for our consumers, employees, and retail partners worldwide".

The purchase, which is expected to close by January 2019, will see PepsiCo, most famous for the Pepsi soft drink, acquire a company that specializes in the production of home fizzy drink dispensers.

Goldman Sachs acted as financial advisor to PepsiCo and Centerview also acted as financial advisor to PepsiCo.


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