Dr Pepper Snapple Group, Inc. (DPS), Plano, TX, has reached an agreement to acquire Bai Brands, LLC, Hamilton, NJ, and its complete portfolio of high-growth premium antioxidant infused beverages for $1.7 billion

Bai provides a strong platform to incubate and grow better-for-you beverages throughout the non-carbonated and carbonated beverage sectors, according to DPS. Bai is expected to generate approximately $425 million in net sales in 2017 and add an incremental $132 million to DPS’ current net sales expectation for 2017.

“We’re excited to welcome Bai into our family of great brands,” said Larry Young, DPS president and CEO. “In a relatively short time, Bai has carved out a leadership position in the enhanced water category and has now extended that success into other fast-growing and profitable categories. We’re equally impressed with their innovation pipeline, which will continue to meet the needs of consumers seeking great tasting, low-calorie beverages with natural flavors and no artificial sweeteners.”

Mr. Young continued, “Bai has contributed greatly to our allied brand line-up since we began distributing it broadly in 2013. Adding it to the broad range of choices and options in our company-owned portfolio is a natural next step. Moving forward, we will empower Bai’s management team to continue the breakthrough and disruptive branding and innovation that have revolutionized their categories and work with them to put the brand in front of more consumers in more places.”

Bai is one of the fastest growing beverage brands, offering a family of premium better-for-you beverages. The company’s product portfolio spans across several high-growth beverage categories including enhanced water, carbonated flavored water, coconut water and premium ready-to-drink teas. With its Bai, Bai Bubbles, Cocofusion and other innovative brands, Bai is positioned for expanding growth in key beverage segments. These highly profitable categories are projected to continue to grow worldwide for the foreseeable future. The acquisition of Bai will further enable DPS to meet growing consumer demand for better-for-you beverages, the company said.

Bai will operate within the Packaged Beverages segment and continue to be led by founder Ben Weiss.

“Over the past seven years, Bai has proven to be an agent of change in a marketplace that is rapidly evolving,” said Mr. Weiss. “We’ve worked tirelessly to challenge the notion that better-for-you beverages can’t taste good. On our journey, we found a strong ally in DPS, an ally who embraced our mission to change the way the world drinks. Now, it only makes sense to continue our quest together. We are thrilled to join the DPS family and create a new path forward with infinite possibilities.”

The transaction, which is subject to customary closing conditions, is expected to close in the first quarter of 2017. The boards of both companies have approved the transaction.

Credit Suisse Securities (USA) LLC is serving as exclusive financial advisor to Dr Pepper Snapple Group and Morgan, Lewis & Bockius LLP is acting as legal counsel. J.P. Morgan Securities LLC is serving as exclusive financial advisor to Bai and Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal counsel.