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Beverage giant The Coca-Cola Company (NYSE:KO) has not shied away from acquiring other smaller beverage brands to expand its portfolio. Here’s a look at how one acquisition paid off for the company and its shareholders.
What Happened: Over the last 15 years, Coca-Cola has put an emphasis in expanding its portfolio of non-carbonated soft drinks with higher growth coming from that category.
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In 2007, Coca-Cola announced the $4.1-billion acquisition of Vitaminwater maker Energy Brands Inc., also known as Glaceau.
“Glaceau has built a great business with high-quality growth, as well as a strong pipeline of innovative products and brands," Coca-Cola CEO Neville Isdell said at the time. "We envision even faster growth for Glaceau as part of Coca-Cola’s enhanced range of brands for North American customers and consumers."
The company said it would expand Vitaminwater in the U.S. and then worldwide.
Sales of Vitaminwater hit $1 billion annually years after the acquisition and the brand remains a staple in the non-carbonated soft drink portfolio of Coca-Cola.
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Coca-Cola acquired the remaining 85% stake in sports drink brand BODYARMOR for $5.6 billion in 2021, marking its largest acquisition and a continued bet on non-carbonated soft drinks.
Related Link: Coca-Cola Q2 Earnings Smashes Estimates
Investing $1,000 in Coca-Cola: The Vitaminwater acquisition was announced before market open on May 25, 2007. A $1,000 investment could have purchased 16.25 shares based on a price of $51.56 at open.
Coca-Cola performed a 2-for-1 stock split in July 2012, which would have taken the hypothetical investment to 38.78 shares.
The $1,000 investment would be worth $2,433.06 today based on a price of $62.74 for Coca-Cola at the time of writing.
The investment would have returned 143.3% over the last 15 years, or around 9.6% on average annually.
Image: Wikimedia Commons
Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.