Willkie Advises PAI Partners in $3.3B Acquisition of Tropicana, Naked and Other Select Juice Brands Across North America from PepsiCo

August 3, 2021

PAI, a leading private equity firm with strong experience in the food and beverage space and longtime Willkie client, will be the majority shareholder of the transferred business.

On August 3, it was announced that PepsiCo, Inc. (NASDAQ: PEP) has entered into an agreement with longtime Willkie client PAI Partners to sell Tropicana, Naked and other select juice brands across North America, and an irrevocable option to sell certain juice businesses in Europe, which will result in combined pre-tax cash proceeds of approximately $3.3 billion while retaining a 39% non-controlling interest in a newly formed joint venture. PAI, a leading private equity firm with strong experience in the food and beverage space, will be the majority shareholder of the transferred business, with PepsiCo retaining exclusive U.S. distribution rights to the portfolio of brands in its best-in-class, chilled Direct Store Delivery for small-format and foodservice channels.

These 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.

PAI Partners is a pre-eminent private equity firm, investing in market-leading companies across the globe. PAI manages around €15 billion of dedicated buyout funds and, since 1994, has completed 84 investments in 11 countries, representing over €65 billion in transaction value.

PepsiCo products are enjoyed by consumers more than one billion times a day in more than 200 countries and territories around the world. The company generated more than $70 billion in net revenue in 2020, driven by a complementary food and beverage portfolio that includes Frito-Lay, Gatorade, Pepsi-Cola, Quaker, Tropicana and SodaStream.

The cross-border, multidisciplinary Willkie deal team is led by partners Robert Rizzo in New York and Faustine Viala in Paris, and includes partners Nathalie Duguay, Morgan McDevitt, Erin Kinney, Jeffrey Korn, Philipp Girardet, Eugene Chang, Geri Anne McEvoy and Russell Pinilis.