Reyes to Buy Schenck
More on Schlafly

FILED FEBRUARY 10, 2011

Dear Client:

It's been a long and rocky road, but Reyes Beverage Group is finally set to purchase Schenck Company, the 13 mil case blue system out of Orlando, Florida (Central Florida's largest). Employees were informed earlier today. The deal is expected to close in April.

Recall that Reyes had made an "informal" offer to Schenck's board back in September, which allegedly set off a scramble by MillerCoors to organize an alternate deal to presumably keep Reyes out of Florida. MillerCoors had until October 29 to try to cobble together a coalition of groups to negotiate with Schenck. But when it became apparent that no deal would be forthcoming, Schenck was notified by MillerCoors before the deadline that it was free to seek out another deal, and ultimately the Reyes offer stood alone like an obelisk in the desert.

There had been reports of friction between MC and its largest distributor, starting with Reyes' refusal to sign the new contract after the J-V was formed and ending with MC's initial behind-the-scenes scramble to keep them out of Florida (we hear JJ Taylor, Keg 1, Andrews, others were approached at various times). Is this a thawing in relations, or was it more a matter of not having other viable offers? You can discern that for yourself. But clearly MillerCoors didn't want a lawsuit with their largest distributor, so they followed the letter of the contract closely, (in 2008, Reyes made a run at Thies Distributing in Florida in 2008, which brought a lawsuit from Coors. In the end, on the eve of the creation of MillerCoors, Reyes got a breakup fee and Thies was eventually sold to Gold Coast and JJ Taylor).

The deal gives the largest beer distributor a beachhead in the important Florida market, and adds another 13 million cases to their coffers.


REPORT: SCHAFLY NEARING A SALE? WELL....

The St. Louis Post-Dispatch online sounded the alarm early this morning that the St. Louis Brewery better known as Schlafly was getting closer to a sale, as cofounders have just signed confidentiality agreements with 12 local investors and shared financial information . The St. Louis Biz Journal notes that "four to six of those investors look like promising candidates...adding that he and Kopman are in no hurry to sell any of their shares...An employee stock ownership component will also be part of the plan." Schafly, which was up 14% according to current 52-week IRI data, announced last year that they intended to sell in order to put a succession plan in place; founder Tom Schlafly has no kids.

Co-founder Dan Kopman told BBD this morning the stories, while accurate, were a little bullish on any transaction's immediacy. He emphasized their lack of formal discussions, and that any sale - this year or beyond - will focus on keeping the brand local, its culture, and employees.

"This town has gone beer business crazy," Dan says. "We're really busy trying to keep the day-to-day things going. Once we get to April, we'll have some time to really focus on this."

Until tomorrow, Harry

BrewPic of the Day: http://www.facebook.com/#!/pages/Beer-Business-Daily/189913234369698



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