Shares of Celsius Holdings, Inc. (NASDAQ: CELH) are trading higher today after the company announced a long-term distribution agreement with PepsiCo, Inc. (NASDAQ: NASDAQ:PEP), which will also make an investment in Celsius.
Under the agreement, PepsiCo will become the preferred distribution partner globally for Celsius.
In addition, PepsiCo will make a net cash investment of $550 million in Celsius in exchange for convertible preferred stock. The investment equates to an estimated 8.5% ownership in Celsius on an as-converted basis.
“We believe the opportunity to partner with a global best-in-class distributor provides Celsius with significant near-term additional shelf space in both existing retailers as well as new expansion within the independent retailers that represent a significant portion of the U.S. convenience and gas channel where approximately 70% of energy drinks are sold. It also provides a strategic partnership that is expected to accelerate growth for both companies globally,” Celsius CEO and Chairman John Fieldly said.
See Also: Could PepsiCo Buy Out Celsius Holdings Or Monster Beverage? Why M&A In Energy Drinks Market Is Heating Up
Price Action: Celsius shares are up 8.66% at $96.67 at the time of publication, according to Benzinga Pro.
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