PepsiCo Buys Stakes worth $550 million in energy drink maker Celsius

PepsiCo announced Monday a $550 million investment in energy drink maker Celsius Holdings as part of a long-term distribution deal with the smaller company.

Energy drinks are one of the fastest-growing nonalcoholic beverage categories.

In the first quarter, Celsius’s U.S. revenue soared 217% to $123.5 million as demand for its energy drinks exploded.

Shares of Celsius rose 8% in morning trading on the news, bringing its market value to $6.7 billion.

Celsius is expecting to gain more shelf space in existing retailers and expand more into independent stores, like gas stations.

Celsius, which was founded in 2005, has reported explosive growth for its energy drinks during the pandemic. In the first quarter, its U.S. revenue soared 217% to $123.5 million.

Pepsi’s investment in Celsius translates to a minority stake of roughly 8.5% in the company.

The company pitches its beverages as “healthy” energy drinks, targeting younger consumers who are active and exercise.

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