Coca-Cola buys rest of BodyArmor in its largest-ever brand acquisition
Coca-Cola acquired full control of BodyArmor on Monday in a deal that values the sports drink company at $8 billion.
Why it matters: This is the largest brand acquisition in Coke's history and should give Pepsi-owned Gatorade some fierce competition in the market.
The backdrop: Mike Repole founded BodyArmor in 2011, just four years after selling his previous company, Glacéau (SmartWater, VitaminWater), for $4.1 billion — also to Coke.
- BodyArmor made headlines in 2014 when Kobe Bryant bought a 10% stake and hit it big in 2018 when Coke bought 15%. Now, Coke is acquiring the remaining 85%.
- Of note: Bryant's family will collect roughly $400 million from the sale just a few months shy of the two-year anniversary of his passing.
The big picture: Gatorade still dominates, but BodyArmor — created as a healthier alternative — has narrowed the gap in recent years.
- In 2015, Gatorade had 77% market share, compared to 18% for Powerade and 0.5% for BodyArmor.
- As of last month, Gatorade was down to 64%, with BodyArmor (18%) leapfrogging Powerade (13%), per WSJ (subscription).
Between the lines: BodyArmor has signed big-name athlete partners like Naomi Osaka and Kyler Murray to compete with Pepsi's established giant, while Gatorade has launched new, healthier products.
- BodyArmor's sales have exploded since Coke's initial acquisition, from $250 million domestically in 2018 to an expected $1.4 billion this year.
- The sports drink market itself has also expanded, suggesting the newcomer isn't stealing market share so much as creating it.
The bottom line: Repole last year said BodyArmor "is either going to go bankrupt in five years or ... be the No. 1 sports drink by 2025." Monday's news makes the latter sound a little less crazy.