The Coca-Cola Company announced today that it has acquired full control of sports drink maker BodyArmor for $5.6 billion, its largest acquisition to date.
The beverage giant is exercising its option to purchase BodyAmor in full at a pre-existing discount, as included in a 2018 deal that gave Coke U.S. distribution rights to BodyArmor and a 15% stake in the brand.
According to a press release, New York-based BodyArmor will be managed as a separate business within Coke’s North America operating unit and its current executive leadership team, including co-founder and chairman Mike Repole and president Brent Hastie, will remain with the brand through at least 2022 and will work “on vision and strategy for 2023 and beyond.”
“BODYARMOR has been a great addition to the system lineup over the last three years, and the company has driven continuous innovation in hydration and health-and-wellness products,” said Alfredo Rivera, president of the North America operating unit of Coke, in a press release. “We’re excited to bring BODYARMOR into The Coca-Cola Company and work with Mike Repole and his leadership team on the next stage of growth.”
In the past year BodyArmor has emerged as the number two brand in the sports drink category, overtaking Coke’s own Powerade. According to NielsenIQ, BodyArmor has a 16.5% dollar share of the category, while Coke has an existing share of 13.8% for the 52-week period ending October 9. Meanwhile, Gatorade owner PepsiCo controls 66.3% of the space.
In the same period, dollar sales of BodyArmor have increased 46.9% to about $1.3 billion, while Coke’s portfolio was up just 2.4% to $1.1 billion and PepsiCo rose 12.1% to $5.5 billion.
BodyArmor was founded in 2011 by serial entrepreneur Lance Collins and Repole, who had previously co-founded Glaceau, the maker of Vitaminwater and Smartwater, which sold to Coke in 2007 for $4.1 billion. In 2013, NBA All-Star Kobe Bryant joined BodyArmor as a director and the company’s third largest shareholder, as well as a prominent face of the brand.
JUST IN: @DrinkBODYARMOR announces sale to Coca-Cola at a valuation of $8 Billion.
Announcement released at 8:24 AM ET as a tribute to Kobe Bryant.
Bryant bought 10% of company in 2014 for $6M. After dilution, his family will receive about $400M. https://t.co/EqSaRoeVRG
— Darren Rovell (@darrenrovell) November 1, 2021
“Ten years ago, we set out with a vision to create a better-for-you sports drink with a goal of becoming the #1 global sports drink,” Repole said in the release. “Our talented leadership team under Brent Hastie, our 400 dedicated employees and incredible Coca-Cola bottling partners have helped us build this remarkable brand. If it wasn’t for Kobe Bryant’s vision and belief, BODYARMOR would not have been able to achieve the success we had. I couldn’t be more excited to become part of the Coca-Cola family and set our sights on the future.”
The deal has been in the works since at least February, when Coke notified U.S. antitrust regulators that it was seeking to acquire a controlling stake in BodyArmor. Reports that the deal was in its closing stages last week suggested BodyArmor was exploring a valuation as high as $8 billion.
At $5.6 billion, the BodyArmor acquisition passed Coke’s $5.1 billion purchase of Costa Coffee in 2018 as its largest in company history. The deal also comes at a time where Coke has aimed to double down on its larger brand acquisitions, notably Costa and Topo Chico, and has divested underperforming brands like Zico and Odwalla. In recent years, Coke has also passed on several acquisition opportunities, including Health-Ade and Suja, after making initial investments in those companies.
With Coke set to acquire the remaining 85% share of BodyArmor, that means it will also be buying out Keurig Dr Pepper’s (KDP) 12.5% stake in the company.
As part of the agreement, Repole will work on developing new marketing, packaging and innovation strategies across Coke’s still beverages portfolio, the release noted.