PepsiCo moves ahead with deals in the COVID-19 era

While many businesses in Westchester have found their activities and ability to pursue deal-making constrained by the COVID-19 situation, Purchase-based PepsiCo has managed to move ahead with both domestic and international deals.

PepsiCo and Vital Pharmaceuticals Inc., the manufacturer of Bang Energy drinks, announced this morning that they have entered into an exclusive alliance for PepsiCo to distribute the Bang Energy brand of beverages in the U.S. This alliance is effective immediately. The Bang Energy brand was introduced in 2012 and is carried in more than 200,000 outlets in the U.S.

“In the ultra-competitive energy category, Bang Energy has thrived, pioneering the performance energy segment and attracting the next-generation of energy consumers,” said Kirk Tanner, PepsiCo Beverages North America CEO. “This alliance plays a central role in PepsiCo’s overall energy-beverage strategy and enables us to significantly accelerate the distribution of Bang Energy to meet rising consumer demand.”

This followed PepsiCo’s April 24 acquisition of Rockstar, a California-based manufacturer, distributor and marketer of energy beverages and related products. The deal had been announced on March 11.

In a filing with the Securities and Exchange Commission, PepsiCo reported there was an upfront cash payment of approximately $3.85 billion and contingent consideration related to future tax benefits associated with the acquisition of approximately $700 million. The purchase price is subject to certain adjustments.

PepsiCo also reported that on March 23 it acquired all of the outstanding stock in Pioneer Foods, a food and beverage company in South Africa that exports its products globally. The total consideration transferred was approximately $1.2 billion. PepsiCo said it will account for the transaction as a business combination in the second quarter of 2020.

In addition, PepsiCo reported that on Feb. 21 it entered into an agreement to acquire all of the outstanding stock of Be & Cheery, one of the largest online snacks companies in China, from Haoxiangni Health Food Co., Ltd., for $705 million. The purchase price will be adjusted for net working capital and net debt amounts as of the acquisition date compared to targeted amounts set forth in the acquisition agreement. The transaction is subject to certain regulatory approvals and is expected to close in the second half of 2020.