Coca-COla Set to Pay $5.6 Billion for Control of BodyArmor
Image Source: (ESPN)
October 31, 2021
Coca-Cola Co. is set to pay $5.6 billion to acquire BodyArmor in a deal that values the company at roughly $8 billion. This deal would give Coke full control and ownership of BodyArmor.
Coca-Cola currently owns 30% of BodyArmor and controls the distribution of products. The deal would see the company buy out the remaining 70% of ownership from founders and investors. Some of the notable investors are James Harden of the Brooklyn Nets, Mike Trout of the Los Angeles Angels, and the estate of Kobe Bryant.
Kobe Bryant had invested roughly $6 million in BodyArmor in 2013 when it was a start-up. With Kobe passing away in 2020 his estate now could receive around $400 million for the sale of his stake.
The acquisition of BodyArmor is a huge win for Coke as it looks to get more invested in sports drinks, an area currently dominated by PepsiCo and their ownership of Gatorade. Coke could look to compete with the growing popularity of BodyArmor whose sales were are $250million when the company first invested in 2018. BodyArmor sales are currently projected to reach around $1.4billion, roughly a 560% increase.
BodyArmor's products differ from other sports drinks in the market, such as Gatorade (PepsiCo) and Powerade (Coca-Cola) by not containing artificial sweeteners, colors, or flavors. This is a staple of BodyArmor as the brand markets as a healthy alternative to competitors.
Coke could look to continue the sale of their other sports drink Powerade which represented 13% of sales of sports drinks and pair with BodyArmor that currently accounts for 18% of sales. This would see Coca-Cola make up some ground on PepsiCo whose sales of Gatorade account for a massive 64% of sports drink sales according to Goldman Sachs analyst Bonnie Herzog.
When this acquisition goes through for Coke it will be the largest brand acquisition in the company's history and could pay dividends in Coke's continuous battle in the beverage industry with PepsiCo.
Source: (The Wall Street Journal)