Dive Brief:
- Bang Energy, which filed for bankruptcy in October, reportedly plans to sell the business, according to recent filings, with Monster Energy the “best-positioned to acquire” the brand, Stifel analyst Mark Astrachan said in a research note.
- He supported that assertion by noting that Monster is Bang’s largest creditor in bankruptcy and is a co-rights holder to a 5% perpetual royalty/license for use of the Bang beverage trademark. At the same time, he said Monster is challenging Bang’s ability to transfer the Bang trademark license to an acquirer, which would give Monster “near total control over Bang’s future.”
- Bang and its parent have been struggling for a few years amid increased competition in the fast-growing energy drink space and legal disputes that ultimately contributed to the bankruptcy filing.
Dive Insight:
While the Stifel analyst noted there are no public indications that Bang and Monster are in talks, a deal makes sense on several levels.
An acquisition would be accretive to Monster’s 2024 earnings and likely be a “modest, all-cash purchase,” Astrachan said. Monster would grow its market share, with Bang’s currently at 2.6% of the U.S. energy
drink category compared to Monster’s 35.1% share.
Monster also would likely take control of a Bang-operated 400,000-square-foot manufacturing facility near Phoenix that could produce about 15% of Monster’s U.S. volumes and help it supply a larger portion of the company’s West Coast production needs.
Monster and Bang are no strangers to each other.
Bang and its parent company filed for bankruptcy in October to “help the company recover from recent challenges” and to put in place a new distribution network. The filing came after Monster Energy won $293 million in a false advertising and trade secrets case against Bang. Monster was identified in bankruptcy court papers as Bang’s largest unsecured creditor.
If Monster decides not to bid, it’s possible that Keurig Dr Pepper, which reportedly was in talks to purchase Bang last August, could step in.
A spokesperson for Monster declined to comment “on any rumors or speculation.” Keurig Dr Pepper also declined to comment to Food Dive for the same reasons.
Bang still has a highly recognizable brand name in the growing energy drink marketplace. But the brand could stand to benefit from a new, more focused owner. In addition to the bankruptcy, the last few years have seen Bang lose market share and watched as its former CEO Jack Owoc, who was ousted in March, tussled with snack and beverage giant PepsiCo.
