Investments

Celsius Power Drink Will get $550 Million Funding From PepsiCo

Celsius is a sugar-free, caffeinated beverage that markets itself as a wholesome different to different vitality drinks.



Photograph:

John Parra/Getty Photographs for CLD

PepsiCo Inc.

PEP 1.22%

is investing $550 million for a stake within the firm behind the Celsius vitality drink that has generated buzz on social media, increasing the soda and snacks firm’s wager on the vitality drinks market.

PepsiCo made the funding as a part of a take care of

Celsius Holdings Inc.

CELH 11.96%

that may give the maker of Mountain Dew and Gatorade a long-term deal to distribute Celsius merchandise. In 2020, PepsiCo paid $3.85 billion to purchase Rockstar Power, one other vitality drink.

Celsius is a sugar-free, caffeinated glowing beverage that markets itself as a wholesome different to different vitality drinks and food regimen sodas. The corporate claims its merchandise assist burn physique fats, and it makes use of influencers, celebrities and health instructors akin to Olympic snowboarder

Shaun White

and mannequin

Sara Sampaio

to advertise the drinks on TikTok and Instagram.

The corporate is publicly traded and had income of $314.3 million in 2021, up from $130.7 million within the earlier yr, and ended final week with a market capitalization of $6.7 billion. The shares closed Friday at $88.96, up nearly 20% yr to this point.

PepsiCo is investing in shares that have been valued at $75 within the transaction, which is under the place Celsius shares have been buying and selling just lately. PepsiCo is buying convertible most popular inventory that provides it the rights to 7.33 million shares or the equal of an 8.5% possession stake. The popular shares pays a 5% annual dividend.

Shares of Celsius jumped 16% in Monday morning buying and selling following the announcement.

Write to Connor Hart at connor.hart@wsj.com

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