J.W. Childs Seen Making SoBe Offer

Brandweek,  April 24, 2000  by Gerry Khermouch

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South Beach Beverage, the new age beverage upstart that has generated fast growth with its SoBe lines of herbally reinforced drinks, has found a buyer: Boston investment boutique J.W. Childs, which last month bought Monsanto's NutraSweet for $440 million.

Execs at SoBe, Norwalk, Conn., declined to comment Friday but an announcement was expected over the weekend or early this week. No price could be learned, but with the brand on track to ship 20 million-plus cases this year, it is almost certain to exceed $250 million.

SoBe had been known to be shopping the brand to a number of prospects, including financial players like North Castle and major beverage companies like Coca-Cola and Campbell Soup. Under the deal with Childs, incumbent management led by co-founders John Bello and Tom Schwalm would stay in place, sources said. South Beach Beverage is widely held, with Bello believed to hold at most a 12% stake after outside investors including suppliers and distributors were solicited for investments to raise further cash after an initial mis-start under the South Beach brand name. Since going to the SoBe name, the brand has soared.

John Childs has previously done well with investments in new age leader Snapple Beverage and holds stakes in Empire Kosher Poultry and the Chevys restaurant chain. Also said to be a principal in the buying group is Tim Healey, formerly of Select Beverages, meaning the investment group will provide access both to capital to fund future growth and to a corps of seasoned beverage overseers.

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