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Coca-Cola acquires Glaceau for $4.1 news
25 May 2007

Chicago: The world's leading beverages company Coca-Cola has acquired flavoured water specialist Glaceau also known as Energy Brands Inc for $4.1 billion.

Coke is probably hoping that the vitaminwater brand of sweet, colorful water drinks with added vitamins will offer an alternative to consumers fewer of which are buying soft drinks and are opting for energy drinks and sports drinks perceived as healthier.

Tata Tea, which last year bought a 30-per cent stake in Glaceau for $677 million, said it would receive about $1.2-billion for its stake, nearly doubling its investment. Tata's purchase, announced in August, valued Glaceau at about $2 billion.

Glaceau founder and Chief Executive J. Darius Bikoff did not reveal his personal stake Glaceau but said it is 70 percent privately owned.

New York-based Glaceau's 2006 revenues are said to have been at $355 million and are forecast to reach $700 million this year.

Bankers said the acquisition valued the company at 9 to 10 times the company's trailing 12-month revenue, a huge premium to the median multiple of 1.2 times for public nonalcoholic drink companies.

Glaceau received early funding from private equity firm TSG Consumer Partners, and sold its 30-percent stake last year to Tata Tea.

Coke has promised to operate Glaceau as a separate business and Bikoff and two other top executives, Mike Repole and Mike Venuti have agreed to stay on and run the business for at least three years.

Over a period of time, the company will become more integrated into Coke.

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Coca-Cola acquires Glaceau for $4.1