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By: David Gelles, DealBook – NY Times.com

The coconut water craze is coming to China.

Vita Coco, the biggest seller of coconut water in the United States, agreed on Monday to sell a 25 percent stake in itself to the owner of Red Bull China for about $166 million.

The deal, which values All Market, the parent company of Vita Coco, at about $665 million, is an important milestone for the coconut water market. Once seen as a passing fad, coconut water continues to gain in popularity around the world as soda sales weaken.

Coca-Cola owns the second-largest coconut water brand, Zico. But Vita Coco has emerged as the industry leader, and will now be available in the world’s most populous country for the first time.

Vita Coco was founded in 2004 by Michael Kirban and his friend Ira Liran. Since then, Vita Coco has established a sophisticated supply chain throughout the tropics, allowing it to efficiently harvest, process and package coconuts. The co-founders continue to own significant stakes, along with Verlinvest, a Belgian private equity firm.

Celebrities including Madonna and Matthew McConaughey also own small stakes. The deal will allow some early employees and investors to cash in on the soaring value of the brand by selling shares to the Reignwood Group, the parent company of Red Bull China.

“Vita Coco’s growth in the U.S. has been well documented, less so the brand’s exponential growth in Europe and more recently, Japan,” Mr. Kirban, who is chief executive, said in a statement. “We expect China to follow suit.”

Vita Coco has found a powerful ally in Red Bull China.

Red Bull China is a separate company from Red Bull, the Austrian company behind the popular energy drink. Red Bull China acquired the rights to sell Red Bull products to Chinese consumers in the early 1990s. It has increased sales of the energy drink there to more than $2.5 billion a year with a robust marketing and distribution operation.

Recently, Red Bull China went looking for other brands it could sell alongside its staple energy drink. Chanchai Ruayrungruang, chairman and founder of Reignwood Group, wanted to secure an equity stake in Vita Coco, believing the value of the company would continue to rise over time.

“We immediately recognized the potential for the Vita Coco brand in China,” Mr. Ruayrungruang said in a statement. “We are confident health-minded Chinese consumers will quickly embrace and remain loyal to the Vita Coco brand.”

Barclays advised Vita Coco, and the Giannuzzi Group provided legal advice.