Los Angeles Clippers star Kawhi Leonard joins energy drink company X2 Performance in an equity deal
- Kwahi Leonard joined X2 Performance in an equity deal and will acquire two board of directors seats.
- X2 lured Leonard through a Series D funding round led by private equity company L Catterton.
Kawhi Leonard has arrived in the equity deal space.
The Los Angeles Clippers superstar has agreed to an equity stake agreement with energy drink maker X2 Performance. The terms of Leonard's equity stake were not made available, but company CEO Mark French told CNBC that Leonard is a "significant shareholder."
The deal also gives Leonard two seats on the company's board of directors. X2 dedicated part of its website to the 2019 NBA Finals MVP and will use his image and likeness to expand.
"He will be the face of the brand," French said in an interview Monday, adding Leonard is "very hands-on" with X2's marketing approach.
"There isn't a more perfect partner for this than Kawhi," French said. "He's perfect for us because he's serious and not flashy."
X2 lured Leonard in a Series D funding round that raised roughly $14 million. The company wants an additional $3 million to grow brand and product development, French said.
In a statement announcing the partnership, Leonard praised the momentum X2 is building as it looks to enter a crowded energy drink market. Research and consulting firm Grand View Research estimates the market will reach $84 billion by 2025.
"I have been approached by many beverage and supplement brands, but I decided to join X2 because it is natural with clean ingredients," Leonard said. "I love the products and the impact it's had on my training and performance."
Private equity company L Catterton led X2's funding round, which also added former New York Jets general manager Mike Tannenbaum, Tampa Bay Buccaneers linebacker Lavonte David and top CAA sports agent Mike Levine.
X2 products, including pre-workout supplements and energy drinks, are used by more than 20 major professional sports teams, including the NBA and National Football League. X2 products are sold on Amazon and now available at CVS. The company plans to announce more retail partnerships in the coming weeks.
French declined to disclose the X2's revenue but said he expects 300% growth in sales in 2021.
"We're not going to outspend big brands with flashy advertising or fancy marketing," French said. X2 will promote itself on Facebook during its "Buy Black Friday" series and will repurpose a Leonard interview on Instagram. "But we are going to tell our story like our brand – natural and organic. We have a tagline that Kawhi came up with – 'The best-kept secret in sports until now.'"