BA Sports Nutrition And Founder Mike Repole Respond To Frivolous Lawsuit Filed By Keurig Dr. Pepper's Bottling Company

WHITESTONE, N.Y., April 10, 2019 /PRNewswire/ -- Keurig Dr. Pepper's (KDP) subsidiary, The American Bottling Company, has filed a lawsuit against BA Sports Nutrition (BODYARMOR) and its Founder and Chairman, Mike Repole, claiming wrongful termination of its distribution agreement. BODYARMOR views this lawsuit as meritless and plans to vigorously defend against these baseless claims.

The distribution contract between BODYARMOR and Dr. Pepper Snapple Group (DPSG) was very clear – and specifically provided that, if there was a change of control of DPSG that BODYARMOR could rightfully terminate the distribution agreement.

BODYARMOR and DPSG had a good partnership; but the Keurig acquisition resulted in a clear change of control and management of the company.  In fact, the majority of the DPSG senior leadership team, including then Chairman and CEO, Larry Young and then CFO Marty Ellen, left the company and an entirely new leadership team led by Bob Gamgort, CEO of KDP, was put together.

Following months of numerous meetings and conversations after the acquisition with Gamgort, JAB Holding Company executive David Bell, and the new KDP leadership team, BODYARMOR was left with the clear and unmistakable impression that Allied Brands were not a priority, and of no interest to KDP. In fact, in numerous conversations that Repole had with Gamgort, Gamgort stated that the Allied Brands were 1% of the volume of DPSG and 99% of the noise – indicating his frustration caused by the Allied Brands. Gamgort also stated to Repole that the Allied Brands were not even a part of 2019 planning. Fiji, another Allied Brand at the time of the acquisition, also left the company when Keurig acquired DPSG.

Given the belief that KDP was not in support of the Allied Brands strategy, BODYARMOR made a commercially reasonable decision – that was within its rights and in the best interest of its shareowners and the company's future – to terminate the KDP distribution agreement and instead distribute BODYARMOR through the Coca-Cola network.

The performance of BODYARMOR in the new Coca-Cola network has been great, ahead of initial aggressive expectations, with the brand up more than 100%. BODYARMOR and all shareowners are benefitting from this switch in distribution, including KDP.  In fact, KDP, which owns approximately a 10% share in BODYARMOR and is the third largest shareholder behind Repole and The Coca-Cola Company, has already seen a significant return on its investment. DPSG's initial investment, which KDP obtained after the acquisition of DPSG, was approximately $26 million.  Based on Coca-Cola's investment in BODYARMOR, KDP's ownership was valued at $200 million, and in addition they received a $35 million pay-out. We are extremely confident that KDP will see a significant increase in the value of its investment now that BODYARMOR is in the Coca-Cola network. 

Both BODYARMOR and Mike Repole are very confident that this meritless case will be dismissed based on the clear and unambiguous language of the parties' contract.

SOURCE BODYARMOR