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PepsiCo and PAI Partners join to optimise portfolio of juice businesses

PAI Partners

PepsiCo has entered into an agreement with PAI Partners, a private equity firm specialising in the food and beverage sector, to sell select juice brands such as Tropicana and Naked across North America and an option to sell certain European juice businesses. This will result in combined proceeds of around $3.3 billion, while retaining a 39 per cent non-controlling interest in a newly formed joint venture. 

PAI Partners will be the majority shareholder of the transferred business, with PepsiCo retaining exclusive US distribution rights to the portfolio of brands in its chilled Direct Store Delivery for small-format and foodservice channels. 

“This joint venture with PAI enables us to realise significant upfront value, whilst providing the focus and resources necessary to drive additional long-term growth for these beloved brands,” PepsiCo chairman and CEO Ramon Laguarta said.  

“In addition, it will free us to concentrate on our current portfolio of diverse offerings, including growing our portfolio of healthier snacks, zero-calorie beverages and products like SodaStream, which are focused on being better for people and the planet.” 

PAI Partners is delighted to bring the storied beverage brands into its portfolio via the new partnership, managing partner Frédéric Stévenin said. 

“We believe there is great growth potential to be realised through investments in product innovation, expansion into adjacent categories and enhanced scale in branded juice drinks and other chilled categories,” Stévenin said. 

“We are also thrilled that PepsiCo will remain involved as our partner in the joint venture as we execute our plans to drive the future success of these brands.” 

The juice businesses delivered approximately $3 billion in net revenue in 2020, with operating profit margins that were below PepsiCo’s overall operating margin in 2020. 

PepsiCo expects to use the proceeds from the sale of these assets primarily to strengthen its balance sheet and to make organic investments in the business. 

The transaction is expected to close in late 2021 or early 2022, subject to customary conditions, including works council consultations and regulatory approvals. 

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