📰 Celsius Buys Alani Nutrition in $1.8B Power Move
The energy drink maker strengthens its position in the growing wellness and fitness market with a major deal.
Celsius Holdings CELH 0.00%↑ is making a bold move to expand its presence in the booming energy and wellness drink sector. The company announced it will acquire Alani Nutrition, a brand known for its female-focused health and fitness beverages, in a deal valued at $1.8 billion.
The acquisition, structured as a mix of cash and stock, marks a strategic expansion for Celsius as it seeks to capitalize on the rising demand for functional beverages. With this deal, Celsius is expected to generate around $2 billion in annual sales, further cementing its position as a major player in the industry.
Tapping into a growing market
Energy drinks have surged in popularity, particularly among younger consumers looking for alternatives to traditional sodas and sugary beverages. Brands like Alani Nutrition, founded in 2018, have gained traction by catering to health-conscious consumers with products that emphasize clean ingredients, functional benefits, and appealing flavors.
“Strategically, this acquisition makes a lot of sense,” said Wedbush analyst Gerald Pascarelli. “Alani is one of the fastest-growing brands in the space, and this deal expands Celsius’ market share in the energy drink segment.”
Celsius has been steadily growing its brand and distribution network, benefiting from a $550 million investment by PepsiCo in 2022. The company’s latest move follows a broader trend of beverage giants investing in functional drinks. Last year, Keurig Dr Pepper acquired a 60% stake in energy drink brand Ghost for nearly $1 billion.
Deal structure and future plans
The agreement includes a net purchase price of $1.65 billion, with $1.275 billion paid in cash, a $25 million earn-out based on performance targets, and $500 million in newly issued Celsius stock. This gives Alani Nutrition’s founders, Katy and Haydn Schneider, along with its operator Congo Brands, a minority stake in the combined company.
Celsius plans to integrate Alani Nutrition into its operations while retaining key leadership from Congo Brands as advisors. The company sees significant growth potential in leveraging its distribution network to bring Alani products to more retailers and international markets.
Competitive landscape
The energy drink market has become increasingly competitive, with brands like Monster, Red Bull, and newer entrants like Ghost and Prime battling for consumer attention. Celsius has differentiated itself by positioning its products as healthier alternatives, free from artificial preservatives and loaded with functional ingredients like green tea extract and B vitamins.
By adding Alani Nutrition to its portfolio, Celsius aims to further diversify its offerings and strengthen its connection with female consumers, a demographic that has historically been underrepresented in the energy drink market.
“Our goal is to empower people with products that fit their active lifestyles,” said Celsius CEO John Fieldly. “Alani Nutrition shares that vision, and together, we can accelerate growth in the fast-evolving functional beverage space.”
Looking ahead
The acquisition comes at a time when consumers are increasingly shifting towards beverages that offer more than just hydration. Functional drinks, including energy drinks, protein shakes, and wellness-focused offerings, are projected to continue their strong growth trajectory in the coming years.
With the deal expected to close later this year, Celsius is betting that its expanded portfolio will drive further revenue growth and help it compete more aggressively in an industry that shows no signs of slowing down.
Source: Celsius Holdings Press Release, Reuters
Disclaimer:
The information and opinions provided in this article are for informational and educational purposes only and should not be considered as investment advice or a recommendation to buy, sell, or hold any financial product, security, or asset. The Future Investors does not provide personalized investment advice and is not a licensed financial advisor. Always do your own research before making any investment decisions and consult with a qualified financial professional before making any investment decisions. Please consult the general disclaimer for more details.