Keurig Dr Pepper has a path to “a sizeable deal in the near future,” analysts at Consumer Edge Research concluded in a Jan. 27 report. The analysts, led by Brett Cooper, connected several dots, including KDP’s recent addition of two finance experts to its corporate board since December. The most recent, Juliette Hickman, joined KDP as an independent director in January after spending more than two decades as an investment analyst at Capital Group. Justine Tan, appointed to the board in December, is a partner at JAB Holding, the controlling shareholder of KDP. Before JAB, Tan helped manage US operations at Singapore-based investment firm Temasek, following a stint at Goldman Sachs as an investment banker. The appointments come as KDP is on track to pay down enough debt from the Keurig Green Mountain/Dr Pepper Snapple merger to “open itself to the next step-change transaction,” the analysts wrote. “Historically low interest rates make for a favorable time to make an all-cash offer and set the company up for future transactions.”

SO, WHO? A quick informal survey of other analysts revealed a view more toward bolt-on acquisitions with high growth beverage businesses, or major distribution deals, like the one last year with Polar Seltzer. Discussions with sources provide no clear answer as to what kind of deal KDP (and JAB) might make, or whether it would be in the US or overseas. But there is plenty of speculation. Here’s an overview:

NESTLÉ READYREFRESH? One speculative idea is Nestlé Waters’ ReadyRefresh US home and office delivery business. Primo (formerly Cott) has been seen as a natural buyer for that business, and it’s unclear whether Nestlé would insist on ReadyRefresh being acquired together with its bottled water business, all of which is under review for a possible sale. However, KDP CEO Bob Gamgort’s mission since the Keurig Green Mountain/Dr Pepper Snapple merger has been to reach consumers across categories, platforms, and channels, including through e-commerce. ReadyRefresh could help Keurig expand its home and office coffee delivery business and create revenue synergies. Plus, ReadyRefresh has been expanding distribution of branded ready-to-drink beverages using the fleet-based delivery platform. Looking overseas, one industry observer said Nestlé’s European bottled water brands such as Perrier and San Pellegrino could be attractive targets for KDP, although those premium brands are not part of the portfolio review.

OTHER WATER. LaCroix would be expensive and owner Nick Caporella is unlikely to sell. Plus, KDP now has a major distribution deal with seltzer water maker Polar Beverages. Fast growing Essentia remains independent and could help replace volume following KDP’s split from Fiji Water. However, KDP purchased another Lance Collins creation, Core Water, in 2018 for $525 million after announcing the Fiji exit.

ENERGY. Further out in the realm of speculation: Monster Energy or Bang Energy would provide a scaled energy play for KDP, which does not have a major energy drink brand. While KDP owns smaller energy brands Venom and Xyience and has an equity stake in Lance Collins’ Adrenaline Shoc fitness energy drink, the energy category remains an industry growth engine and those brands will take time to build. However, Monster Beverage’s market cap is slightly bigger than Keurig Dr Pepper’s, which could complicate such a deal for controlling shareholder JAB Holding. It’s worth noting here that Coca-Cola, Monster’s global distributor, owns 19% of the company and has board representation. Meanwhile, Bang Energy owner VPX Pharmaceuticals is tied up in court with distribution partner PepsiCo after VPX terminated the arrangement. An arbitrator agreed in December that PepsiCo can keep distribution until October 2023.