US-based flavoured beverages producer Dr Pepper Snapple Group (DPS) has reached an agreement to acquire beverage company Bai Brands, along with its complete portfolio of antioxidant infused beverages.

The cash purchase price of $1.7bn includes a tax benefit of approximately $400m on a net present value basis and will be financed through new unsecured notes and a short-term commercial paper.

DPS stated that Bai offers a platform to enhance better-for-you formulations across the non-carbonated and carbonated beverage categories.

"Bai has proven to be an agent of change in a marketplace that is rapidly evolving."

It is expected to generate around $425m in net sales in 2017 and add an incremental $132m to current net sales expectation for 2017.

The deal is expected to be approximately $0.03 dilutive to reported diluted EPS in 2017, driven by planned increases in marketing investments and increased interest expense associated with the financing of the purchase price.

DPS president and chief executive officer Larry Young said: "We're excited to welcome Bai into our family of great brands.

"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 flavours and no artificial sweeteners."

The product lines of Bai include enhanced water, carbonated flavoured water, coconut water and ready-to-drink teas across the brands Bai, Bai Bubbles and Cocofusion.

Bai will be included in the packaged beverages segment of DPS and its founder Ben Weiss will continue to lead the company.

Weiss said: "Over the past seven years, Bai has proven to be an agent of change in a marketplace that is rapidly evolving. 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 is expected to close in the first quarter of 2017 and is subject to customary closing conditions.