PepsiCo nears deal to acquire probiotic drinks company KeVita: sources

Thu Oct 13, 2016 7:02pm EDT
 
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By Lauren Hirsch

(Reuters) - PepsiCo Inc (PEP.N: Quote) is nearing a deal to acquire sparkling probiotic U.S. drinks company KeVita Inc, people familiar with the matter said on Thursday, in the latest push by the carbonated beverage giant to diversify its soft drinks business.

The deal would be PepsiCo's first outright acquisition through its venture arm dubbed Naked Emerging Brands, whose mission is to expand the company's portfolio of sugary drinks by developing brands that appeal to health-conscious consumers.

PepsiCo already owns a minority stake in KeVita, and has a distribution agreement with the Oxnard, California-based company, the people said.

The acquisition of KeVita could be finalized as early as this month, and will likely value the privately held company at less than $500 million, the people said. There is always a possibility that the negotiations end unsuccessfully, the people cautioned.

The sources asked not to be identified because the negotiations are confidential. A spokesperson for Pepsi said that the company does not comment on "rumor or speculation." KeVita could not be immediately reached for comment.

Carbonated beverages sales have softened in recent years, as consumers seek calorie-free alternatives to sugary drinks. Several U.S. cities have introduced a so-called 'soda tax' on sugary drinks, or are seeking to do so.

KeVita sells drinks that include sparkling probiotics, master brew kombucha tea, and vinegar tonics. Probiotics, proponents say, help aid digestive and immune health.

KeVita was founded in 2010 by Chakra Earthsong, a nutritional consultant, and her friend, entrepreneur Bill Moses. They combined Earthsong's at-home water kefir ferment with Moses's winemaking fermentation knowledge.   Continued...

 
Cans of Pepsi are displayed at the Roland Garros stadium in Paris, France, May 28, 2016. REUTERS/Jacky Naegelen/File Photo