NAB Responds to For Sale Report
FILED SEPTEMBER 6, 2012Dear Client:
As reported yesterday, Reuters reported that NAB has put itself up for sale, with an estimated price tag of $400 million, citing "sources familiar with the matter." Shortly afterward, NAB chief Rich Lozyniak sent an email saying that NAB has been the "focus of buying and selling rumors since its inception. We have made it clear that we are always exploring opportunities to build our business." Rich wouldn't comment on speculation, other than to say that they are "vested and committed to our business. We will continue to grow North American Breweries by focusing on what we do best: make and sell quality beer." So... neither a confirmation nor total denial. Rich has previously said publicly, after all, "There will be an exit one day for KPS."
BANKER LEAK. In our experience with these things, it is usually a banker who is the unnamed "source familiar with the matter" -- often the bankers representing the firm itself. Why would they leak? Remember that Pabst owner Dean Metropoulos said at the Beer Summit that he learned Pabst was for sale through a blurb in the Wall Street Journal. Leaking to a respected financial wire service is a great way of getting the word out -- and this leak even provides a "suggested retail price" for the brewery of $400 million.
DEAL FOR DEAN? In fact, I wouldn't be surprised if Dean himself was an interested party in NAB. The craft portfolio in particular would be a fit for them, and it would also provide him five breweries with capacity to fill with a few of his currently contracted brands. So instead of spreading rumors, I decided to ring him directly. Dean said that, no, "not at the present time. We have many similar brands with great potential that we have decided to focus in on."
For its part, NAB is about flat in year-to-date Symphony IRI all channel scans, although dollar sales are down around 3%. Labatt is down around 13%.
DEALS, DEALS, DEALS
Yesterday's news that St. Louis A-B distributor Grey Eagle Distributors is hopping the river to purchase Illinois Distribution Company, the A-B distributor in Bellville (covering East St. Louis), is the latest in a string of distributor deals.
By our rudimentary count, there have over twenty distributor acquisitions so far this year, and that's just the ones we know about. And they've run the gamut, from the huge Meritage deal to buy Columbia (one source pegs it at an incredible $600 million for 35 million cases) to little A-B bolt-on deals like tiny Coco Distributing selling 500k cases of A-B brands to Ludwig Distributing in Arkansas.
But the deals that get the most press are the big 'uns. The Grey Eagle deal, the Meritage deal, Reyes buying 6 million case Chesbay (likely a $100+ million deal), Major Brands buying the Miami branch from A-B, and A-B buying branches in Seattle, Eugene, Oklahoma City, to name a few. However, most deals have been in the 1 to 2 million case range. And more are coming, we understand. The uncertainty of the capital gains tax will likely speed deals to close by December 31. I suspect many a beer lawyer will be working over the holidays, and that just breaks my heart.
(Ed. Note: Send your distributor deal news to hs@beernet.com, sources protected). Stay tuned.....
Until tomorrow, Harry
"Arriving at one goal is the starting point to another."
-John Dewey
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Today's Sell Day: 5
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