Bang Energy's parent files for Chapter 11
Vital Pharmaceuticals, the maker of Bang Energy drinks, filed for Chapter 11 bankruptcy protection in the Southern District of Florida.
Why it matters: It wasn't that long ago that VPX was reported to be in talks to be acquired by Keurig Dr Pepper at a $2 billion-plus valuation, only to have negotiations fall apart, according to Bloomberg reports.
Details: VPX said it sought court protection as "a restorative action to help the company recover from recent challenges, including multiple lawsuits that impacted the company’s short-term outlook."
- It also cited the "cost impact of reconstituting the company’s national distribution network that resulted in a summer revenue gap."
- VPX said it secured an additional $100 million from its "syndicate lenders," to support operations.
- The company declined to comment further to Axios.
Yes, and: The lawsuits include the $293 million in damages recently awarded to rival Monster Energy, which is listed in the filing as the largest unsecured creditor, by a California jury tied to a false advertising and trade secrets case.
- Up to $1 billion each in assets and liabilities were listed in the Chapter 11 filing, a process the company intends to use to recapitalize the business and emerge in an improved competitive position, VPX said.
Of note: VPX further claimed that its market share dwindled under national distributor PepsiCo, but that it will soon launch its own direct store distribution network.
Flashback: After talks with Keurig Dr Pepper ended, CEO Jack Owoc claimed Bang was not for sale and would have been worth more that the $2 billion to $3 billion-plus price range cited by Bloomberg, based on its revenue of $1.44 billion in 2021 and historic multiples.
State of play: Despite the woes of Bang, interest in the energy drink space remains, with only a couple of viable candidates up for grabs, including Nutrabolt's C4 Energy and Alani Nu.
- Constellation Brands was previously reported to be in talks to merge with Monster Beverage, while PepsiCo invested $550 million in Celsius.
- Keurig Dr Pepper, which told Axios that M&A was a top priority and that it looks "at a lot of opportunities," recently inked a distribution deal with Red Bull in Mexico, where the energy drink brand's sales have been falling.