Wholesale sales for CORE were between $70 and $80 million, according to a source close to the deal; retail sales were close to $200 million according to the brand. According to the announcement, KDP expects to realize $90 million in tax benefits in the deal.
“KDP has been an outstanding partner for CORE and I am certain that, under its ownership, CORE will continue to see tremendous long-term success,” said founder Lance Collins in a press release. “I am a strong supporter of the KDP strategy and business model and am looking forward to being a shareholder in the company.”
Core was founded in 2015 by Collins, a serial beverage entrepreneur known for starting brands like Fuze and Body Armor, in partnership with music producer Lukasz Gottwald, also known as Dr Luke. Other investors included celebrities like Katy Perry, Juicy J. and Diplo, as well as a variety of Hollywood executives. One company that benefited from the sale, albeit indirectly, was KDP rival Coca-Cola Co., which owned a stake in Core via incubator L.A. Libations. An early investor and distributor of Core, L.A. Libations is partially owned by Coke. Retailer 7-Eleven was also an investor, along with food and beverage entrepreneur Jason Cohen.
Last year, the company raised nearly $40 million.
The deal comes amid a reshuffling of the allied, independent brands distributed by Dr Pepper Snapple Group, which was taken over by Keurig earlier this year. Pressure increased on KDP to buy Core when Fiji, another premium water company in the allied brand portfolio, cut ties with KDP from a distribution standpoint. Another allied brand, Body Armor, is also leaving the fold, having agreed to a minority investment from the Coca-Cola Co. in August. The company purchased Bai in 2016 and owns a stake in High Brew coffee as well. Vita Coco remains independent but is widely distributed by KDP.
The transaction leaves independent water brand Essentia Water as an increasingly likely takeover target.
According to the release, Whipstitch Capital served as a financial advisor to CORE, while Evercore Partners worked on the buy side with KDP.
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