Celsius Holdings (NASDAQ: CELH) stock surged over 35% in after-hours trading Thursday after the company announced a $1.8 billion acquisition of Alani Nutrition. The cash-and-stock deal aims to strengthen Celsius’ grip on the booming sports and energy drink market.
Alani Nutrition, a female-focused brand launched in 2018, specializes in functional beverages and wellness products. Celsius snagged the company from co-founders, Katy Schneider, Haydn Schneider, and its operator Congo Brands. The move taps into surging demand for energy drinks, especially among younger U.S. consumers embracing fitness and lifestyle trends.
The acquisition mirrors recent industry plays. PepsiCo (NASDAQ: PEP) scooped up an 8.5% stake in Celsius for $550 million in 2022. Meanwhile, Keurig Dr Pepper (NASDAQ: KDP) jumped in last October, grabbing a 60% stake in energy drink maker Ghost for $990 million, with plans to buy the rest by 2028.
Celsius (NASDAQ: CELH) expects the Alani Nutrition addition to push its combined annual sales to roughly $2 billion. For fiscal 2024, Celsius logged $1.36 billion in revenue—a 3% bump from the prior year.
The deal carries a net purchase price of $1.65 billion, plus $150 million in tax assets. Celsius will pay $1.275 billion in cash, toss in a $25 million earn-out, and issue $500 million in restricted stock, handing Alani owners an 8.7% stake.
Analysts see the logic. “Strategically, this deal makes good sense,” said Wedbush analyst Gerald Pascarelli. “Alani is one of the fastest-growing brands in energy with meaningful distribution whitespace.” He predicts the merged company will claim a low-to-mid-teens share of the U.S. energy drink market.
Post-deal, Alani Nutrition will operate within Celsius, and key Congo Brands leadership team members will continue advising the company.
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