Coca-Cola Owns 58% Stake in U.K.'s Innocent
By Paul Sonne
Wall Street Journal
April 10, 2010

Coca-Cola Co. increased its stake in the popular U.K. smoothie maker Innocent Drinks to 58%, gaining majority ownership of a British brand known for its healthy ingredients and social awareness.

The purchase comes a year after Coca-Cola bought an initial 18% share in Fresh Trading Ltd., Innocent's parent, for £30 million, or about $46 million, a deal that valued the London-based smoothie maker between £150 million and £300 million at the time. Terms of the deal to increase the stake to 58% weren't disclosed.

Founded in 1999, Innocent has become the most popular smoothie maker in Britain in part by publicizing its natural ingredients and ethical pledges. In addition to giving 10% of its profit to charity, Innocent uses 100% recycled-plastic bottles and exclusively sustainable ingredients.

The smoothie maker has nursed an eccentric image in the U.K., where it operates trucks covered in artificial green grass and has devised quirky descriptions of its products. Innocent's headquarters is called "Fruit Towers," and the three founders—Adam Balon, Richard Reed and Jon Wright—are referred to as "the boys."

In 2008, Innocent's closely held parent company reported a loss of £7.5 million on sales of £105 million, according to its most recent filing with the U.K. company registry. The previous year, the company posted a profit of £6.15 million on sales of £113.2 million.

Coca-Cola acquired the bulk of its new shares from American businessman Maurice Pinto, one of the company's original investors, who put in £250,000 when Innocent launched 11 years ago. Shares were also bought from a second seed investor and Innocent's three founders.

Under the stipulations of the deal, the three founders retain operational control of the business so long as they remain shareholders. "It's business as usual," a spokeswoman for the company said. She said the founders intend to stay at the business and continue running it.

Coca-Cola is looking to learn from Innocent's unique branding exercises and roll out its products to more customers in Europe. "We have long admired their brand and their products and believe in the business's long-term growth potential," said James Quincey, Coca-Cola business-unit president for Northwest Europe and the Nordics. "We will do all we can to help Innocent make its products available to more consumers in Europe."

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