EPISODE · Dec 9, 2022 · 14 MIN
Keurig Dr Pepper and Nutrabolt (C4 Energy) Deal Explained | Implications to Energy Drinks Market
from the Joshua Schall Audio Experience · host Joshua Schall
Keurig Dr Pepper (NASDAQ: KDP) finally got off their butt and landed a key strategic partnership in the energy drinks market. On December 8, KDP and C4 Energy entered into a strategic partnership that includes a long-term sales and distribution arrangement, which is expected to meaningfully increase retail availability and household penetration for the C4 Energy brand. KDP is making a pre-tax cash investment in Nutrabolt of $863 million, in exchange for preferred equity ownership stake of approximately 30% that has additional earn-out benefits, rights to increase ownership in certain capital raising scenarios, and board representation. This will make KDP the second-largest shareholder investor in Nutrabolt behind its Founder, Chairman and CEO, Doss Cunningham. Net of the anticipated cash tax benefits, the investment represents a multiple below 4x estimated 2023 net sales, which are expected to be above $650 million. This strategic investment was something that I predicted in October 2021 in a YouTube video titled “Keurig Dr Pepper Buys These Five Beverage Companies Next.” You can watch that YouTube video here - https://youtu.be/AHrmn87c26w. In that content, I not only explain my conviction pick for the energy drink category being Nutrabolt (aka C4 Energy), but also provide logic on its valuation being cheaper than Celsius Holdings and other key points that seem eerily familiar to yesterday's news. I’ll unpack all that original commentary and more throughout the content, that hits on some under-the-radar business reasons why KDP chose Nutrabolt, a little history on the sports nutrition brand portfolio Nutrabolt, and explanation around how this investment fills an important short-term need at KDP and potentially creates a long-term advantage. I'll also explain the implications to the energy drinks market, and explain some outside stakeholders that were winners and losers in this announcement. FOLLOW ME ON MY SOCIAL MEDIA ACCOUNTS LINKEDIN - https://www.linkedin.com/in/joshuaschallmba TWITTER - https://www.twitter.com/joshua_schall INSTAGRAM - https://www.instagram.com/joshua_schall FACEBOOK - https://www.facebook.com/jschallconsulting MEDIUM - https://www.medium.com/@joshuaschall
What this episode covers
Keurig Dr Pepper (NASDAQ: KDP) finally got off their butt and landed a key strategic partnership in the energy drinks market. On December 8, KDP and C4 Energy entered into a strategic partnership that includes a long-term sales and distribution arrangement, which is expected to meaningfully increase retail availability and household penetration for the C4 Energy brand. KDP is making a pre-tax cash investment in Nutrabolt of $863 million, in exchange for preferred equity ownership stake of approximately 30% that has additional earn-out benefits, rights to increase ownership in certain capital raising scenarios, and board representation. This will make KDP the second-largest shareholder investor in Nutrabolt behind its Founder, Chairman and CEO, Doss Cunningham. Net of the anticipated cash tax benefits, the investment represents a multiple below 4x estimated 2023 net sales, which are expected to be above $650 million. This strategic investment was something that I predicted in October 2021 in a YouTube video titled “Keurig Dr Pepper Buys These Five Beverage Companies Next.” You can watch that YouTube video here - https://youtu.be/AHrmn87c26w. In that content, I not only explain my conviction pick for the energy drink category being Nutrabolt (aka C4 Energy), but also provide logic on its valuation being cheaper than Celsius Holdings and other key points that seem eerily familiar to yesterday's news. I’ll unpack all that original commentary and more throughout the content, that hits on some under-the-radar business reasons why KDP chose Nutrabolt, a little history on the sports nutrition brand portfolio Nutrabolt, and explanation around how this investment fills an important short-term need at KDP and potentially creates a long-term advantage. I'll also explain the implications to the energy drinks market, and explain some outside stakeholders that were winners and losers in this announcement. FOLLOW ME ON MY SOCIAL MEDIA ACCOUNTS LINKEDIN - https://www.linkedin.com/in/joshuaschallmba TWITTER - https://www.twitter.com/joshua_schall INSTAGRAM - https://www.instagram.com/joshua_schall FACEBOOK - https://www.facebook.com/jschallconsulting MEDIUM - https://www.medium.com/@joshuaschall
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Keurig Dr Pepper and Nutrabolt (C4 Energy) Deal Explained | Implications to Energy Drinks Market
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