BURLINGTON, Mass. and FRISCO, Texas - Keurig Dr Pepper (NASDAQ: NASDAQ:KDP) has reached an agreement to acquire the production, sales, and distribution assets of Kalil Bottling Co., an independent bottler based in Arizona. The transaction, announced today, is set to enhance KDP's direct-store-delivery (DSD) operations across the state, adding bottling and distribution rights for popular brands such as Canada Dry, 7UP, A&W, Snapple, and Core Hydration.
The acquisition will allow KDP to service an estimated 7.4 million consumers and around 4,500 retail outlets in Arizona. KDP plans to incorporate a production facility in Tucson and sales and distribution centers in Tucson and Tempe into its operations post-acquisition. The company expects to add approximately 425 employees to support the expansion and is actively recruiting from Kalil's existing workforce.
Tim Cofer, CEO of KDP, emphasized the strategic nature of the acquisition, stating that it strengthens the company's national DSD capabilities and allows for increased scale and brand building in a key growth area. John Kalil, President of Kalil Bottling Co., expressed optimism about the future collaboration with KDP, citing the legacy of the Kalil family in Arizona.
Andrew Archambault, President of U.S. Refreshment Beverages at KDP, acknowledged Kalil's long-standing partnership and the company's commitment to maintaining service excellence in Arizona. The acquisition is anticipated to be finalized in the third quarter of 2024, though financial terms have not been disclosed.
Keurig Dr Pepper, a major player in the North American beverage industry, boasts a diverse portfolio and claims leadership in several beverage categories. The company, which generates annual revenue of around $15 billion, is also known for its #1 single serve coffee brewing system in the U.S. and Canada.
This announcement is based on a press release statement and contains forward-looking statements that involve uncertainties and are subject to risks. Keurig Dr Pepper has stated that it is under no obligation to update or modify any forward-looking statements unless required by law.
InvestingPro Insights
As Keurig Dr Pepper (NASDAQ: KDP) moves to enhance its direct-store-delivery (DSD) operations with the acquisition of Kalil Bottling Co., investors and industry observers will be keenly monitoring the impact of this strategic move on the company's financial metrics. Keurig Dr Pepper's commitment to growth is evident in its recent financial data and management strategies. According to InvestingPro, Keurig Dr Pepper has a robust market capitalization of 46.43 billion USD and has maintained impressive gross profit margins, which stood at 55.44% for the last twelve months as of Q1 2024. This margin reflects the company's efficiency in managing its cost of goods sold and underscores its ability to generate substantial profit from its revenues.
InvestingPro Tips highlight that Keurig Dr Pepper has not only been aggressive in share buybacks but has also raised its dividend for three consecutive years, signaling confidence in its financial stability and commitment to returning value to shareholders. With a dividend yield of 2.54% as of the last dividend's ex-date on March 27, 2024, the company presents an attractive proposition for income-focused investors. Furthermore, Keurig Dr Pepper is trading at a low P/E ratio relative to near-term earnings growth, with a P/E ratio of 21.86 and a slightly adjusted P/E ratio of 21.01 for the last twelve months as of Q1 2024, which may suggest that the stock is undervalued given its growth prospects.
For those interested in further analysis and tips, there are an additional 11 InvestingPro Tips available for Keurig Dr Pepper, which can be found by visiting https://www.investing.com/pro/KDP. Investors looking to gain a comprehensive understanding of KDP's financial health and potential can take advantage of an additional 10% off a yearly or biyearly Pro and Pro+ subscription using the coupon code PRONEWS24.
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