Growing consumer demand for healthier beverages has persuaded Dr Pepper Snapple Group (DPS) to buy Bai Brands LLC, an antioxidant beverage maker for $1.7bn (£1.4bn) in cash.
Bai is a fast-growing beverage brand that presents Dr Pepper Snapple (DPS) with a strong platform on which to grow "better-for-you beverages", including enhanced water, carbonated flavoured water, coconut water and premium ready-to-drink teas.
The purchase price includes a tax benefit of around $400 (£322) on a net present value basis, DPS said in a statement Tuesday.
The group is expected to gain about $425m (£342m) in net sales in 2017 from the acquisition, adding $132m (£106m) to its current net sales expectation for next year.
DPS President and CEO said Bai's success over a relatively short amount of time in the enhanced water sector has impressed the group.
Bai specialises in low-calorie beverages made with natural flavours and no artificial sweeteners.
DPS bought a minority stake in Bai last year. The company is one of DPS's "allied brands", which are healthy-drinks companies distributed through the group's network.
DPS began distribution of Bai's brands in 2013, and Young said the purchase of the company was a natural next step.
Young said: "Moving forward, we will empower Bai's management team to continue the breakthrough and disruptive branding and innovation that have revolutionised their categories and work with them to put the brand in front of more consumers in more places."
Bai will continue to be led by founder Ben Weiss, who said the company is excited about its continued partnership with DPS and the "infinite possibilities" it presents.
The transaction is expected to close in the first quarter of 2017.