US: Republic in more acquisition talks, says CFO
US wine and spirits distributor Republic Beverage Co. is in talks to buy more wholesalers as it looks to further grow in the wake of its merger with National Distributing Co. (NDC).
The new company, announced earlier this month, will become the second-largest wine and spirits wholesaler in the US with a presence in around 20 states. Republic yesterday (23 May) announced that it has bought the Oklahoma-based Majestic Marketing Co. to become the largest wholesaler in the state.
Paul Fine, Republic's executive vice president and chief financial officer, told just-drinks today that the company was looking to expand its presence across the US.
"We are talking with numerous different players in the industry to varying degrees," he said but declined to give further details, citing confidentiality agreements.
Fine said Republic and NDC were not intent on surpassing Southern Wines and Spirits as the number one wholesaler in the US but instead were targeting building a national network.
"I don't think we want to be number one just to be number one. We want to have a network that means that we can completely serve our retailers and suppliers around the country and we will expand into as many states as it makes sense to achieve that."
Consolidation among retailers and suppliers has fuelled a similar trend among distributors in the US. Retailers were demanding a "one-stop shop" where they could source more products from a single distributor, while wine and spirits producers wanted a wider, more national network from their distributor.
Fine said the deal between Republic and NDC was a "true merger" with both having shared control over the running of the company, adding that the deal would allow the companies to build on their relationships with key suppliers.
"There was very little geographical overlap between the two companies, so geographically it makes sense to fit the businesses together. There's also a fair amount of supplier alignment so our relationships with suppliers can be expanded and consolidated - strategically, that's good for us."
Fine added that he "did not envisage" Republic losing any distribution arrangements due to the merger with NDC, insisting that the deal would strengthen the company's relationships in more states across the US.
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