Pepsi announced its plan to acquire SodaStream, an Israeli countertop carbonated water machine manufacturer. Pepsi will pay $144/share (an 11% premium to the last closing price). The deal is funded by cash on hand. Closing of the transaction is expected in January 2019. Sodastream’s revenues for 2017 were $543M, a 19.1% EBITDA margin, and has been FCF positive for 2 years.
This deal is a positive for Pepsi, following on its strategic plan to increase healthier drinks and snacks to its portfolio.
No change to our thesis or price target.
[tag PEP]
Julie S. Praline
Director, Equity Analyst
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