BURLINGTON, Mass., and FRISCO, Texas - Keurig Dr Pepper Inc. (NASDAQ: NASDAQ:KDP) has set the price for its secondary public offering of 60 million shares at $32.85 each. The shares are being sold by a subsidiary of JAB Holding Company s.a.r.l. ("JAB"), with the transaction also including a 30-day option for the underwriter to purchase up to an additional 9 million shares.
Upon completion of the offering, JAB's ownership in KDP's outstanding common stock will reduce to approximately 16.5%, or 15.8% if the underwriter's option is fully exercised. JAB's remaining shares will be bound by a 90-day lock-up agreement with the underwriter, restricting further sale for that period.
Morgan Stanley (NYSE:MS) is serving as the underwriter for this secondary offering. The offering is subject to a registration statement and a prospectus filed with the U.S. Securities and Exchange Commission (SEC) on August 19, 2022, and is available for review on the SEC's website or through Morgan Stanley's Prospectus Department.
This sale of shares does not constitute an open market offer or a solicitation to purchase securities in any state or jurisdiction where such an action would be considered unlawful before proper registration or qualification under local securities laws.
Keurig Dr Pepper, a prominent North American beverage company, boasts a diverse portfolio with more than 125 owned, licensed, and partner brands. With annual revenues around $15 billion, the company maintains a strong presence across various beverage segments, including soft drinks, coffee, and water. Keurig Dr Pepper is known for its Keurig® brewing system and an array of popular beverage brands such as Dr Pepper®, Canada Dry®, and Snapple®.
The information for this article is based on a press release statement. It should be noted that forward-looking statements contained in the press release involve uncertainties and actual results may differ materially from those projected. The company is not obligated to revise or update any forward-looking statements unless required by law.
In other recent news, Keurig Dr Pepper reported considerable growth in its third-quarter earnings for 2024, with a 3.1% increase in constant currency net sales and a 3.5% growth in volume/mix. The company also announced a strategic acquisition, securing a 60% stake in the energy drink brand, GHOST. This move is expected to contribute approximately 300 basis points to the company's growth, according to an analysis by Jefferies. In recent developments, Keurig Dr Pepper has secured a term loan facility totaling $1.25 billion, which is structured to provide additional financial flexibility for general corporate purposes, including financing acquisitions. Despite challenges in the U.S. coffee segment, Keurig Dr Pepper remains focused on its full-year outlook and is preparing for potential inflationary impacts. Other recent developments include a 7% dividend increase and a concentration on strategic initiatives aimed at long-term success. These strategies are reflected in the company's international growth, with net sales up by 6.5% due to strong performances in Mexico and Canada. However, Jefferies has reduced the company's price target to $41 from $42, while maintaining a Buy rating. As Keurig Dr Pepper moves forward, it plans to provide official 2025 guidance in the next earnings cycle.
InvestingPro Insights
As Keurig Dr Pepper (NASDAQ: KDP) proceeds with its secondary public offering, investors may find additional context from recent financial data and analyst insights valuable. According to InvestingPro, KDP's market capitalization stands at $45.93 billion, reflecting its significant presence in the beverage industry.
The company's financial health appears robust, with a revenue of $15.15 billion in the last twelve months as of Q3 2023, aligning closely with the annual revenue figure mentioned in the article. This consistency in revenue generation underscores KDP's stable market position.
InvestingPro Tips highlight that KDP has been aggressively buying back shares, which could be seen as a positive signal for investor confidence. Additionally, the company has raised its dividend for four consecutive years, potentially appealing to income-focused investors. This dividend growth is further supported by InvestingPro data showing a dividend yield of 2.72% and a dividend growth rate of 6.98% over the last twelve months.
The stock's recent performance has been mixed, with InvestingPro data indicating a 16.36% price total return over the past year, despite a recent 8.29% decline in the past week. This volatility may be of interest to investors considering the timing of the secondary offering.
For those seeking a deeper analysis, InvestingPro offers 11 additional tips on KDP, providing a more comprehensive view of the company's financial outlook and market position.
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