PepsiCo, Inc. (NASDAQ: PEP) has entered an agreement to acquire the prebiotic soda brand poppi for $1.95 billion, including $300 million of anticipated cash tax benefits for a net purchase price of $1.65 billion.

The transaction includes an additional potential earnout subject to performance milestones within a set period after closing of the transaction, which is subject to customary closing conditions, including regulatory approval.

poppi was hit with a class-action suit last year related to accusations about the fiber content of its products, but that hasn’t scared Pepsi from the attractive prebiotic soda market. Competing brand Olipop was recently valued at $1.85 billion in a series C funding round.

“We’ve been evolving our food and beverage portfolio over many years, including by innovating with our brands in new spaces and through disciplined, strategic acquisitions that enable us to offer more positive choices to our consumers,” said Ramon Laguarta, chairman and CEO, PepsiCo in announcing the deal.

Pepsi completed its acquisition of the Mexican-American food brand Siete Foods in January.

“More than ever, consumers are looking for convenient and great-tasting options that fit their lifestyles and respond to their growing interest in health and wellness,” said Laguarta. “poppi is a great complement to our portfolio transformation efforts to meet these needs.”

A fast-growing functional soda brand that combines prebiotics, fruit juice, and apple cider vinegar, poppi was created by Allison and Stephen Ellsworth, discovered on Shark Tank by Rohan Oza and funded by CAVU Consumer Partners from its initial seed round.

“As we look to reorient our portfolio offerings to address white space consumer needs, the poppi brand’s unique intersection with wellness and culture is a perfect addition to our portfolio,” said Ram Krishnan, CEO, PepsiCo Beverages U.S. “Allison and the poppi team have built a magnetic brand that’s ahead of the trends, with a loyal consumer base and a demonstrated capacity for growth. We are big fans of the poppi brand movement and believe this incredible brand paired with our commercial capabilities will drive continued growth and innovation for years to come.” 

“When I created poppi in our kitchen, it was fueled by a desire to create a better-for-you soda,” said Allison Ellsworth, co-founder of poppi. “We never imagined how many people we could reach through hard work, determination and a clear mission to create a functional soda that stands the test of time. We believe poppi is the soda that will be embraced for generations to come, and we’re beyond grateful to the amazing poppi team, our partners who believed in us from the very beginning and most importantly our incredible community. We can’t wait to begin this next chapter with PepsiCo to bring our soda to more people — and I know they will honor what makes poppi so special while supporting our next phase of growth and innovation. I hope our story inspires others to explore their passions, take the risk, and believe that anything is possible.”

Additional terms of Pepsi’s deal with poppi were not disclosed.

Centerview Partners LLC is acting as lead financial advisor to PepsiCo, and J.P. Morgan Securities LLC is also acting as a financial advisor to PepsiCo. Cravath, Swaine & Moore LLP is acting as legal advisor to PepsiCo, and Davis Polk & Wardwell LLP is acting as tax counsel to PepsiCo. Goldman Sachs & Co. LLC is acting as financial advisor to poppi, and Cooley LLP is acting as legal advisor to poppi.