SodaStream on the hunt for acquisitions

SodaStream International, which makes machines to carbonate tap water at home, is looking to acquire companies and beef up marketing in key countries to keep its turnaround going.

The world’s biggest soda water company sold 3 million units in the last 12 months, boosting its customer base 4 percent from the end of 2016 to 11.5 million households, Chief Executive Officer Daniel Birnbaum said in an interview. With about $100 million in cash and no debt, SodaStream is planning to spend to keep the momentum going.

“We’re on the offensive now,” Birnbaum said at SodaStream’s headquarters in Airport City, Israel. “We can buy companies, we can advertise more aggressively. We’re growing.” He didn’t specify which businesses SodaStream is targeting.

SodaStream’s willingness to spend reflects how far it’s come since switching strategies in 2014. With sales and income flagging, the company moved away from at-home cola machines that competed in a $260 billion market against giants like Coca Cola and PepsiCo. Skeptical investors punished the stock, which bottomed out in February last year. With the shift to sparkling water, SodaStream’s profits almost quadrupled in 2016. Its U.S.traded shares have surged 342 percent since the recent low.

Birnbaum plans to focus the company’s efforts in places like the U.S., Japan and Australia. SodaStream is seeing sustained growth across Europe, which accounts for about two-thirds of sales, he said.

That reliance on Europe has hurt SodaStream in the past. The company — which reports in U.S. dollars — lost about $50 million in sales in both 2014 and 2015 when the euro lost 22 percent of its value versus the greenback, Birnbaum said. SodaStream now endeavors more to link operating costs to the country of sales, he said.

“We learned our lesson from that,” Birnbaum said.

Founded more than 100 years ago in the United Kingdom, the company’s global profile has risen only in recent years. It generated headlines around the world as the target of the Boycott, Divestment, Sanctions (BDS) movement, which said the company’s factory in the West Bank perpetuated Israel’s occupation of the Palestinians. Birnbaum describes the plant as a hothouse of coexistence, where 350 Israeli Jews worked side by side with about 500 Palestinians and 450 Israeli Arabs.

SodaStream closed the plant in October 2015 and relocated to a new campus in Rahat, in Israel’s south (BDS continued to call for a boycott of the company). Birnbaum denies that BDS pressure played a role in the decision, saying the move was long planned as part of his growth strategy. But he allows that anti-Israel activists helped etch Sodastream’s name in the public consciousness.

“BDS helped build brand awareness,” he said. “We should pay them royalties.”