By Jonathan Lehrfeld CoStar News
Yogurt maker Chobani is launching its next growth chapter via a pair of transactions with food and beverage giant Keurig Dr Pepper that could set up a record investment in Pennsylvania.
Chobani will pay $800 million to buy back an equity stake in its own company and another $125 million to take over the lease, equipment and operations of a manufacturing and warehouse campus in Allentown, it said Tuesday.
Chobani, a company that has seen revenue growth of 20% annually over the past three years, said it plans to invest about $1.2 billion over the next five years in the 1.5 million-square-foot property, creating more than 900 jobs.
"This $1.2 billion investment from Chobani is the largest private sector investment in the history of Pennsylvania's agriculture industry and will strengthen our dairy industry, support our farmers, and reinforce our position as a national leader in agriculture and food manufacturing," Gov. Josh Shapiro said in a statement.
That facility, about 60 miles northwest of Philadelphia, first opened for production in 2021. It's owned by global investment group Kohlberg Kravis Roberts & Co., CoStar data shows. KKR declined CoStar News' request for comment.
Chobani plans for it to have up to 10 production lines to scale new products. At full capacity, the Allentown facility is expected to source more than 3 billion pounds of Pennsylvania milk annually.
The deals are expected to close in the third quarter of this year, subject to customary closing conditions. Production under Chobani — known for its Greek yogurt — is expected to begin at the facility next year.
Keurig Dr Pepper, or KDP, and Chobani still intend to work with one another in a partnership that originated via a 2023 deal over coffee company La Colombe. KDP said it intends to use the net proceeds from the transactions to reduce debt as it positions its two future businesses, Beverage Co. and Global Coffee Co., for long-term success.
Meanwhile, Chobani said it is investing separately in a new dairy processing facility in Rome, New York; expanding its manufacturing operation in Twin Falls, Idaho; improving its original site in New Berlin, New York; and expanding its facility in Norton Shores, Michigan.
For the record
The commonwealth of Pennsylvania is set to provide $50 million in loans and grants to support infrastructure and site improvements for the project. Chobani may also be eligible for state tax credits.
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