Saturday, May 26, 2007

$4.1 Billion for Vitaminwater

Coca-Cola Co. announced yesterday that it will acquire Glacéau for $4.1 billion in cash. The company, also known as Energy Brands, is the makers of Fruitwater, an energy drink called Vitaminenergy and Smartwater. Glacéau was founded by J. Darius Bikoff slightly less than a decade ago after he discovered that he liked drinking water with a vitamin C tablet after he daily jogging or weekend races. With the help of beverage experts, Mr. Bikoff started mixing his own water-based beverage, spiked with vitamins, which became the popular and yummy Vitaminwater.

According to the NY Times: “While the price tag is substantial for a company with earnings in 2006 of about $350 million, analysts said the cost in avoiding the deal, given Coke’s relatively weak position in noncarbonated beverages, could also be high.”

It would be Coke’s largest acquisition ever, and Coke will need to use debt to finance the deal because the purchase price is more cash than Coke had on hand at the end of last quarter.

Nicely done, Mr. Bikoff.

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