Keurig Dr Pepper Inc., Burlington, Mass., and Plano, Texas, announced that JAB majority-owned subsidiary Maple Holdings B.V. and MDLZ will sell an aggregate of 60 million shares through a secondary offering. MDLZ will sell 40 million shares, bringing its stake to approximately 8.4 percent of KDP's outstanding common stock, while Maple will sell 20 million shares for the benefit of its minority partners.
Additionally, JAB indicated that JAB and Maple will convert the final portion of Maple's minority partners' shares into shares held directly in KDP and will distribute approximately 119 million shares of KDP common stock, representing approximately 8.5 percent of KDP's outstanding common stock, currently held by Maple, to such minority holders. The distribution relates to the minority interests in Maple which were held by more than 100 JAB Consumer Fund (JCF) investors, comprised of mostly sovereign wealth funds, university endowments and family offices which invested alongside JAB over the last five years as part of its beverages investment strategy. Following these transactions, Maple will be renamed JAB Bevco and, through JAB Bevco, JAB and its affiliates will hold approximately 34 percent of KDP's outstanding common stock.
Together, the transactions represent a major milestone step for KDP on its journey to becoming a widely held modern beverage company. Upon the completion of the transactions, KDP's public float will increase to approximately 58 percent, as compared with approximately 13 percent at the time of the completion of the merger of Keurig Green Mountain and Dr Pepper Snapple Group in 2018.
"Today marks the final sale on behalf of and distribution to our minority partners of Maple, who have been invested alongside us for the past five years,” said Olivier Goudet, chief executive officer (CEO) and managing partner of JAB, in a statement. “We are very pleased to now place the remaining minority shares of Maple directly with our JCF partners who are like-minded, long-term focused investors. We continue to be highly confident in KDP's value creation potential and, therefore, JAB intends to remain a large, stable, long-term anchor investor supporting the growth of the company."
Dirk Van de Put, CEO of MDLZ, added: "This transaction brings our stake in KDP down to approximately 8.4 percent, a strategically important ownership level which allows us to retain two board seats and remain large investors in KDP. We see significant upside in KDP and with this level of ownership, MDLZ's shareholders will continue to share in the significant value creation that we believe lies ahead."
Byron Trott, Chairman and CEO of BDT Capital Partners, a significant shareholder in KDP, added: "We are strong believers in KDP, under the capable leadership of Bob Gamgort and his team. We remain a committed long-term shareholder and plan to participate in the continued value creation that we are confident remains ahead for the company."
Keurig Dr Pepper Chairman and CEO Bob Gamgort stated: "Today's news signifies an important milestone in our company's evolution. These transactions represent the realization of JCF's investment that started with the JAB take-private of Keurig Green Mountain in early 2016, which ultimately enabled the creation of KDP. We look forward to welcoming many of the JCF investors as long-term public shareholders of KDP and continuing to partner with JAB, MDLZ and BDT as long-term shareholders."
Under the terms of the transactions, the distributed shares will be subject to a lock-up arrangement with Maple that will ratably apply for a period from six to twelve months. In addition, the remaining shares held by Maple and MDLZ and the shares held by BDT Capital Partners will be subject to a 90-day lock-up agreement with the underwriters. Maple and its affiliates, as well as MDLZ, intend to make the required filings with the SEC, including amendments to their respective existing Schedule 13Ds, upon the completion of the transactions.
Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC are acting as the underwriters for the proposed secondary offering.