Keurig Dr Pepper has landed $7 billion in capital from private-equity firms to finance its $18 billion purchase of JDE Peet’s. The funding comes as the beverage giant looks to assuage investors who have questioned its plan to separate into two independent companies following the acquisition.
The company also announced on Monday that CFO Sudhanshu Priyadarshi, who was slated to become the CEO of the planned coffee spinout will no longer assume the position. Keurig Dr Pepper has initiated a search to fill the role.
CEO Tim Cofer said in a statement Monday that Keurig Dr Pepper has carefully considered shareholder feedback and is “responding with decisive actions,” including the new investment and a “refreshed approach to leadership structure.”
“We are confident this transaction positions KDP to generate significant shareholder value, and we have robust plans to deliver with success,” said Cofer, who is still expected to helm Keurig Dr Pepper's beverage spinout, including brands such as Snapple and 7UP.
The new investment was co-led by Apollo and KKR, with participation from Goldman Sachs. The firms will receive preferred stock in Keurig Dr Pepper. The shares have a conversion price of $37.25 and pay an annual dividend.
Keurig Dr Pepper will use the money to reduce its net leverage after purchasing JDE Peet’s. The acquisition is expected to close in the first half of 2026.
Once the deal closes, Keurig Dr Pepper plans to combine its coffee operations with JDE Peet’s and spin the company off, creating the world’s largest pure-play coffee business.
The split would unwind the 2018 transaction that combined Dr Pepper with Keurig Green Mountain, creating a sprawling beverage giant with a portfolio spanning coffee, Bai, 7UP, Sunkist and A&W.
Earlier this month, reports stated that activist investor Starboard Value had built a stake in Keurig Dr Pepper amid pushback from the proposed deal. The beverage giant's shares fell more than 17% in the week following the announcement.
The private equity investment was announced on the same day Keurig Dr Pepper released its third-quarter earnings.
During the period, the company generated $4.3 billion in net sales, marking a 10.7% year-over-year increase. This included growth at both its coffee and beverage businesses, by 1.5% and 14.4%, respectively.
Clarification: This story's headline was updated to more clearly reflect the nature of Keurig Dr Pepper's latest funding.
