ABC Beverage Corp., f.k.a. Beverage America, Inc. - Page 4

                                        - 4 -                                         
          group) saw an opportunity to buy the business they had been                 
          managing in an LBO.  Although several other competing groups also           
          sought to buy the bottling business, the management group                   
          assembled its financing sooner than the competitors and purchased           
          the company, Mid-Continent Bottlers, Inc. (Bottlers), a                     
          subsidiary of Philip Morris, Inc., in 1986.                                 
               Bottlers was an independent soft drink bottling business in            
          the Midwest, operating primarily in Iowa, Nebraska, and portions            
          of Illinois, Kansas, and Missouri.  Bottlers bottled mainly for             
          Cadbury.  In fact, Cadbury was about 90 percent of Bottlers’                
          business.  Cadbury maintained considerable control over Bottlers’           
          ability to transfer its franchise agreements to bottle for                  
          Cadbury to other parties.  These franchise agreements were key to           
          Bottlers’ business and among its most valuable assets.                      
          Financing the Leveraged Buyout                                              
               The management group used an LBO to finance the purchase of            
          Bottlers from Philip Morris, Inc.  Once the LBO was completed,              
          the management group, consisting of seven executives, owned less            
          than 40 percent of Bottlers.                                                
               The financing for the transaction took several forms.  Not             
          all of the financing was on the most advantageous terms because             
          of certain business exigencies.  For example, the management                
          group was anxious to acquire an ownership interest in Bottlers              
          rather than remain employees, and the management group was under            

Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011