Coca-Cola Co earlier this month agreed in a non-binding letter of intent to sell its Canadian bottling and distribution business to a joint venture of Larry Tanenbaum, head of Kilmer Group, a Canadian family office, and Junior Bridgeman. No financial terms were released; however, the Globe and Mail reported the value to be about $800 million. The letter of intent, which is subject to the parties reaching a definitive agreement, is expected to result in a deal closed later in 2018. Coca-Cola Refreshments Canada operates five production facilities and over 50 sales and distribution centres. Its sale will wrap up Coca-Cola’s refranchising of North American bottling operations.
The Coca-Cola Company Announces Letter of Intent for Refranchising of Canadian Bottling Operations
TORONTO, March 9, 2018 – The Coca-Cola Company today announced that Larry Tanenbaum O.C. and Junior Bridgeman have signed a non-binding Letter of Intent to acquire the company’s Canadian bottling and distribution business, Coca-Cola Refreshments Canada (CCRC).
The acquirer will be a Canadian-based joint venture between Tanenbaum, a prominent Canadian businessman and philanthropist, and Bridgeman, a former NBA player, renowned entrepreneur and current President and CEO of Kansas City-based Heartland Coca-Cola Bottling Company. Each bring a distinct set of skills and expertise to the partnership that will support the long-term growth and success of the Coca-Cola business in Canada.
“Coca-Cola has been refreshing Canadians for more than 120 years and it was important for us to find the right partners that understand our business and the Canadian market,” said Jim Dinkins, President of Coca-Cola North America. “Junior Bridgeman was a proud customer of The Coca-Cola Company for more than 30 years before investing in our system as a bottler, demonstrating his passion for our business and our brands. When you combine that with Larry Tanenbaum’s successful track record and deep Canadian roots, this is the perfect partnership to continue to build our business in Canada with a highly local approach.”
Tanenbaum’s business, The Kilmer Group, has a longstanding history of building successful businesses throughout Canada, in areas as diverse as sports and media, and real estate and infrastructure. Additionally, Tanenbaum serves as chairman of Maple Leaf Sports & Entertainment, the owners of the Toronto Maple Leafs, Toronto Raptors, Toronto FC, Toronto Argonauts and the Air Canada Centre. He is also chairman of the Board of Governors of the National Basketball Association, and serves as a governor of the National Hockey League and Major League Soccer.
“As a lifelong fan of Coca-Cola, I am delighted to be joining the Coca-Cola system,” said Larry Tanenbaum. “I have seen the company evolve over the years and know there is tremendous growth potential for The Coca-Cola Company’s broad range of brands in the Canadian market. There is already a strong foundation and I look forward to working alongside Junior to continue to build the business through great brands, strong local execution and exceptional customer service.”
Junior Bridgeman joined the Coke bottling system in 2017 with the formation of Heartland Coca-Cola, covering territories in Kansas, Missouri and Southern Illinois. Prior to this, Junior created and led one of the largest restaurant franchise operators in the United States, Manna Inc., based in Louisville, Ky. He also had a 12-year career as a professional basketball player in the NBA.
“Coca-Cola has been a big part of my life and I am excited for this opportunity to be part of the Canadian business,” said Junior Bridgeman. “Larry and I are committed to building on the traditions of The Coca-Cola Company while leveraging our heritage of putting people first, serving our local communities, and refreshing Canadians from coast to coast to coast.”
Added Shane Grant, business unit president of The Coca-Cola Company in Canada: “Looking to the future of Coca-Cola in Canada, we could not ask for better partners than Larry and Junior. We already have a strong foundation with The Kilmer Group through its various holdings, and this new partnership will provide unique and unprecedented opportunities as we continue to accelerate the growth of our business.”
CCRC employs approximately 5,800 associates and operates five production facilities and over 50 sales and distribution centres. CCRC conducts business in all 10 provinces and three territories.
This non-binding Letter of Intent initiates the final step to complete the refranchising of all of The Coca-Cola Company’s company-owned bottling operations in North America. In October 2017, the company announced the completion of refranchising in the United States.
The letter of intent announced today is subject to the parties reaching definitive agreements. The parties are committed to working together to implement a smooth transition with minimal disruption for customers, consumers and system associates. Financial terms were not disclosed.
The transaction is expected to close in the second half of 2018.
21st Century Beverage Partnership Model History
The Coca-Cola Company began working with its bottling partners a decade ago on plans to develop a model that evolves the system to serve the changing customer and consumer landscape, with a focus on creating stronger system alignment. A critical step was the company’s acquisition of the North American territories of Coca-Cola Enterprises in 2010, which led to the establishment of Coca-Cola Refreshments.
Since the closing of the transaction involving the North American territories of
Coca-Cola Enterprises, The Coca-Cola Company has accelerated the implementation of the new model by strategically addressing the bottling system, customer service, product supply and a common information technology platform.
Ultimately, the Coca-Cola system in North America will be comprised of economically aligned bottling partners that have the capability to serve major customers, coupled with the ability to maintain strong, local ties across diverse markets in the United States and Canada.
About The Coca-Cola Company
The Coca-Cola Company (NYSE: KO) is the world’s largest total beverage company, offering over 500 brands to people in more than 200 countries. Of our 21 billion-dollar brands, 19 are available in lower- and no-sugar options to help people everywhere more easily control added sugar. In addition to our namesake Coca-Cola drinks, some of our household names around the world include: AdeS soy-based beverages, Ayataka green tea, Dasani waters, Del Valle juices and nectars, Fanta, Georgia coffee, Gold Peak teas and coffees, Honest Tea, Minute Maid juices, Powerade sports drinks, Simply juices, smartwater, Sprite, vitaminwater, and Zico coconut water. At Coca-Cola, we’re serious about making positive contributions to our world. That starts with reducing sugar in our drinks and bringing new and different drinks to people everywhere. It also means continuously working to reduce our environmental impact, creating rewarding careers for our associates, and bringing economic opportunity wherever we operate. In fact, together with our bottling partners, we employ more than 700,000 people around the world. For more information, visit our digital magazine Coca-Cola Journey at www.coca-colacompany.com and follow The Coca-Cola Company on Twitter, Instagram, Facebook and LinkedIn.
About Tanenbaum and Bridgeman
The acquirer is a partnership between Canadian philanthropist and business leader, Larry Tanenbaum O.C., and NBA legend and successful Kansas City-based Heartland Coca-Cola Bottling Company owner, Junior Bridgeman. Tanenbaum and Bridgeman are both remarkable entrepreneurs who are committed to the betterment of their communities, and who invest with a multi-generational perspective and a long term horizon of vision. For more information about Bridgeman’s Heartland Coca-Cola Bottling Company please visit www.heartlandcocacola.com and for more information about Tanenbaum’s Kilmer Group, please visit www.kilmergroup.com.