Coke taking full control of BodyArmor in $5.6B deal

Talks have been going on for some time, but $Coca-Cola (KO.US)$ today is set to buy full control of sports drink maker BodyArmor. Coke already took a 30% stake in the brand in 2018, adding a premium drink to its lineup that includes the Powerade label. The deal for the other 70% will have a price tag of $5.6B, valuing BodyArmor at a electro(lyte)fying $8B, sources told the WSJ.

Backdrop: BodyArmor was launched in 2011 by Lance Collins, the successful beverage entrepreneur who founded Fuze Beverage and NOS Energy Drink, as well as Mike Repole, co-founder of Energy Brands, vitaminwater, and Smartwater. In March 2013, Kobe Bryant purchased a large stake in the company (which the estate currently values at $400M) and $Keurig Dr Pepper (KDP.US)$ also has a 12.5% stake. BodyArmor's products include sports drinks, alkaline water and caffeinated sports drinks, but none of them contain artificial sweeteners, colors or flavors. Compare the returns of top beverage stocks here.

While PepsiCo-owned $PepsiCo (PEP.US)$ Gatorade still dominates the sports drink market, BodyArmor purchases have been climbing quickly and are even expected to generate about $1.4B in retail sales this year. According to Goldman Sachs analyst Bonnie Herzog, Gatorade accounted for 64% of sports drinks sales in the four weeks ended Oct. 9, compared to Coke's Powerade, which represented 13%. However, BodyArmor has now taken the No. 2 spot, with 18% of the total market. Monster Beverage falls after Jefferies warns on competition, supply chain headwinds.