Upcoming AWS Coverage on SodaStream International Post-Earnings Results

LONDON, UK / ACCESSWIRE / November 23, 2016 / Active Wall St. blog coverage looks at the headline from Dr. Pepper Snapple Group Inc. (NYSE: DPS) as the company announced on November 22, 2016, that it has signed a definitive agreement to acquire Bai Brands, LLC and its entire range of antioxidant infused beverages. The deal is valued at $1.7 billion. Register with us now for your free membership and blog access at: http://www.activewallst.com/register/.

One of Dr. Pepper Snapple's competitors within the Beverages - Soft Drinks space, SodaStream International Ltd. (NASDAQ: SODA), announced on November 10, 2016, its results for the three and nine month periods ended September 30, 2016. AWS will be initiating a research report on SodaStream in the coming days.

Today, AWS is promoting its blog coverage on DPS; touching on SODA. Get all of our free blog coverage and more by clicking on the link below:

http://www.activewallst.com/registration-3/?symbol=DPS

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Princeton, New Jersey-based Bai is one of the fastest growing beverage brands and its product portfolio includes enhanced water, carbonated flavored water, coconut water, and premium ready-to-drink teas. The USP of the brand products is that they are enhanced with antioxidants, do not contain any artificial sweeteners, and each serving of the drink contains just one gram of sugar. Dr Pepper is one of the major distributors of the Bai products since 2013 and held 3% stake in Bai and this acquisition is just a natural progression for the company.

Dr Pepper sells some of the most iconic and popular beverage brands, including flagship Dr Pepper and Snapple brands, plus others like 7UP, A&W, Canada Dry, Clamato, Crush, Hawaiian Punch, Mott's, Mr. & Mrs. T mixers, Peñafiel, Rose's, Schweppes, Squirt, and Sunkist soda.

Commenting on the deal Larry Young, DPS President and CEO, said:

"Bai has contributed greatly to our allied brand lineup since we began distributing it broadly in 2013. Adding it to the broad range of choices and options in our company-owned portfolio is a natural next step. Moving forward, we will empower Bai's management team to continue the breakthrough and disruptive branding and innovation that have revolutionized their categories and work with them to put the brand in front of more consumers in more places."

Founder of Bai, Ben Weiss said:

"We've worked tirelessly to challenge the notion that better-for-you beverages can't taste good. On our journey, we found a strong ally in DPS, an ally who embraced our mission to change the way the world drinks. Now, it only makes sense to continue our quest together."

Key Points of the deal

Dr Pepper will pay a total of $1.7 billion as purchase price to acquire Bai Brands and its entire product range of antioxidant infused beverages. The deal will lead to a $400 million in tax benefits on a net present value basis. The financing will be done using a mix of new unsecured notes and short-term commercial paper.

The new range is expected to contribute approximately $425 million in net sales in the year 2017. It would also improve the annual sales guidance for the year 2017 by $132 million. The company expects an increase in spending in Marketing and Branding as well as interest payments on the funds raised to finance the acquisitions. This will dilute the earnings per share for 2017 to the tune of $0.03. The transaction is expected to be accretive to reported diluted EPS in 2018.

Dr Pepper plans to maintain its investment grade, and this transaction will have no bearing on the dividend payments and plans to buy back shares.
The deal is expected to be finalized in the first quarter of 2017, subject to fulfillment of all regulations and statutory conditions.

Once the deal is finalized Bai will be part of Dr Pepper's Packaged Beverages Division and continue to be headed by founder Ben Weiss.

On November 16, 2016, Dr Pepper declared a quarterly dividend of $0.53 per share. On October 27, 2016 Dr Pepper announced results for its third quarter ending on September 30, 2016. The net income in Q3 2016 was $240 million, which is $1.30 per share. The company's net sales rose 3% to $1.680 billion.

Shift in Consumer behavior influencing the packaged beverages segment.

Consumers are increasingly avoiding sugary drinks and products which are associated with health risks such as obesity and diabetes. Governments are also waking up to this fact and taking steps to address health issues linked to sugar consumption. Several cities in the US, like Chicago and San Francisco, have voted for a new tax on sugary beverages.

In October 2016, PepsiCo unveiled an ambitious global 2025 roadmap with the aim of manufacturing healthier products that meet changing consumer preferences. As part of its sustainability goal, Coca-Cola too had announced that it would offer zero calorie or low calorie options by 2020.
On November 22, 2016, PepsiCo announced that it is buying probiotic drink manufacturer KeVita Inc. to diversify its portfolio and reach out to health-conscious consumers.

Stock Performance

At the close of trading session on November 22, 2016, Dr. Pepper Snapple's stock price rose 2.64% to end the day at $87.50. A total volume of 2.47 million shares were exchanged during the session, which was above the 3-month average volume of 1.30 million shares. The stock currently has a market cap of $16.17 billion. The company's shares are trading at a PE ratio of 18.95 and have a dividend yield of 2.42%.

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SOURCE: Active Wall Street