Coca-Cola’s BodyArmor Deal Nets Kobe Bryant’s Estate $400 Million
By CultureBanx Team
- Coca-Cola buys remaining 70% of BodyArmor that generates about $1.4B in retail sales
- Kobe Bryant’s estate stands to collect roughly $400M for its stake in BodyArmor
Coca-Cola (KO -0.35%) is buying the remaining 70% of BodyArmor, the natural sports drink that is looking to dethrone Pepsi’s (PEP -0.21%) Gatorade. The $5.6 billion cash deal values the sports-drink brand at about $8 billion, and NBA Icon Kobe Bryant was an initial investor in the company back in 2013. His estate stands to collect roughly $400 million for its stake, according to The Wall Street Journal. BodyArmor’s CEO, Mike Repole made a promise to the late Kobe Bryant that the brand would be the number one sports drink by 2025. With Coca-Cola now fully acquiring the controlling interest of the company, this is a promise almost fully realized.
Why This Matters: Bryant’s investment is one of the biggest for a modern-day athlete. In 2014, he acquired more than 10% of the company for close to $6 million. Then in 2018, Coca-Cola invested $300 million in the company at a $2 billion valuation, pushing the value of Bryant’s stake to $200 million at that time. The initial Coca-Cola-BodyArmor deal was structured to create value for both companies while also defining a path to ownership in the future.
Bryant sat on the board for BodyArmor and directed multiple advertisements for the company. In addition to Bryant, NBA star James Harden, MLB’s Mike Trout and WNBA star Skylar Diggins-Smith also endorse the brand.
BodyArmor’s sales were about $250 million, now in 2021 the company expects to generate about $1.4 billion in retail sales. Coke also owns Powerade, but had been looking for a natural alternative to compete with the number one sports drink in the space, Gatorade. A Goldman Sachs analyst noted that sales in the four weeks ending October 9, Gatorade had 64% of sales, Powerade had 13%, and BodyArmor had 18% of the market. This growth of the natural sports drink solidified exactly why Coca-Cola wanted to up its investment.
The Bryant backed company has a history with Coca Cola, as its founder has sold multiple products to the soft drink company in the past. Back in 2007, Repole, the majority stakeholder of BodyArmor, sold Glaceau which he co-owned with the SmartWater and Vitamin Water brands to Coke for $4.1 billion. Terms of the deal weren’t immediately disclosed, but it gave BodyArmor access to Coca-Cola’s bottling facilities.
What’s Next: The global sports drink market is projected to grow from $27.2 billion in 2021 to $36.3 billion in 2028. Only time will tell if this move by Coke will help it make a run at Gatorade’s vice-like grip on the market.
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