Coke to Pay $5.6 Billion for Complete Control of BodyArmor

Coke, which already owns 30% of BodyArmor, is buying the remaining 70% from the company’s founders and investors, as well as a group of professional athletes including the NBA’s James Harden and MLB’s Mike Trout, investing in and selling the drink. market helped.

The wealth of Kobe Bryant, an early supporter of BodyArmor, stands to collect nearly $400 million for his stake, some people familiar with the matter said. Mr Bryant invested $6 million and served on the Board of BodyArmor before dying in 2020, these people said.

Gatorade still dominates the sports drink market, although BodyArmor sales are growing rapidly. According to some people familiar with the matter, BodyArmor expects to generate about $1.4 billion in retail sales this year. BodyArmor sales totaled about $250 million in 2018 when Coke first invested in the startup.

Earlier this year, Coke revealed that it was in talks to take a controlling stake in BodyArmor. The transaction is expected to be announced as soon as Monday, the people said. Beverage Digest previously reported that the valuation could exceed $7 billion and Bloomberg News reported that Coke was close to a deal for a controlling stake.

Gatorade, which is owned by PepsiCo Inc., accounted for the lion’s share of the $8.4 billion spent on sports drinks over the past year at U.S. retail stores tracked by Nielsen, according to Goldman Sachs analyst Bonnie Herzog. Gatorade represented 64% of sales in the four weeks ended October 9. Coke’s Powerade, which represented 13%, has failed to break into its rival. According to Ms. Herzog, BodyArmor has now taken the No. 2 spot with 18% of the market.

The BodyArmor transaction will be the largest brand acquisition in Coke’s history, eclipsing the $5.1 billion paid in 2018 for Costa Coffee, which entered the coffee shop business. Chief executive James Quincy is pushing the company to become a “total beverage company.”

There was another major purchase in 2007 of $4.1 billion from Glaseau, the company behind the Vitaminwater and Smartwater brands. BodyArmor co-founder and principal investor Michael Repole also helped Glashu build and sell Coke.

BodyArmor, based in Queens, NY, was launched in 2011 by Mister Repoll co-founder, Lance Collins, an entrepreneur behind successful brands including Fuse Tea and Core Bottled Water. Keurig Dr Pepper Inc. in BodyArmor. has 12.5% ​​stake.

BodyArmor’s products include sports drinks, alkaline water and caffeinated sports drinks. The company has said that none of them contain artificial sweeteners, colors or flavours. The brand has marketed its offerings as healthier alternatives and has enlisted young athletes such as Mr. Trout and Mr. Harden to invest in and appear in its advertisements.

People familiar with the matter said Coke bought a 15% stake in BodyArmor in 2018 for $300 million at a $2 billion valuation. Coke’s bottling network took over the distribution of BodyArmor, earning the beverage giant an additional 15% equity stake in partnership with its distribution and creation of the BodyArmor brand, the people said.

This story has been published without modification to the text from a wire agency feed