Honest Tea, a former Inc. 500 and current Inc. 5,000 company, has signed an agreement to sell a 40 percent stake in its company to Coca-Cola, the two companies announced today in a statement.
Bethesda, Md.-based Honest Tea, which boasted $23 million in revenue in 2007, said the deal will help the company grow at an even faster pace.
"As more consumers become aware of how their decisions impact the health of the planet and themselves, we are thrilled to receive this investment from the world's largest beverage company to help take our brand and our mission to a larger scale and wider audience," co-founder Seth Goldman, who is also an Inc.com blogger, said in a statement.
In an interview this fall with Inc.com in the wake of Coke's $4.1 billion acquisition of Vitaminwater-maker Glacéau, Goldman denied having interest in a similar outside investment.
"As much as a deal like Vitaminwater did is a home run financially, I don't think for us it would make sense based on the way our brand has evolved and is evolving," he said at the time. "What we've been doing has really been street-focused selling -- almost like guerilla tactics."
Honest Tea will continue to operate independently with the same leadership in place, according to the company. Coca-Cola will become Honest Tea's largest shareholder.
Founded in 1998 by Goldman and Barry Nalebuff, Honest Tea has been the bestselling brand of organic bottled tea in the natural foods industry since 2002. Its revenue grew more than 176 percent between 2003 and 2006.
The deal is said to be worth $43 million, according to a report in The Wall Street Journal.
Last updated: Feb 5, 2008
JASON DEL REY was a senior reporter covering technology, branding, and company culture for Inc. magazine. Before joining Inc., his work appeared in Newsday, The (Newark) Star-Ledger, and the Staten Island Advance, and on ESPN.com. He lives in New Jersey. @DelRey