Cadbury and Jim Turner -- principal owner of Dr Pepper Texas -- finalize agreement for Cadbury and Carlyle Group to buy Turner's business (BD 8/27/99). Dr Pepper Texas will be combined with Cadbury/Carlyle-owned American Bottling Co (ABC). Business will be named: "Dr Pepper/Seven Up Bottling Group Inc" and be based in Dallas; ABC now in Darien Illinois. Price $691 mil; $283 mil in cash and $408 mil in debt assumption. In last 12 months, Turner's revenues were $709 mil; EBITDA $85 mil. Deal values Turner at 8.1 times EBITDA. Valuation is comparable to PBG and slightly less than CCE, according to Salomon Smith Barney's Jennifer Solomon. ABC now owned 40% by Cadbury and 60% by Washington D.C.-based Carlyle Group investment firm. New company will have different ownership: Cadbury 40%, Carlyle 53% and Turner plus management 7%. Deal completion anticipated in first half October. Turner will be CEO; Cadbury global beverage chief John Brock will be chairman.

Brock. Says transaction "provides outstanding route-to-market for (Cadbury) brands." Adds, "it's a major step forward in consolidating the independent system." Brock says deal happening now "has nothing to do whatsoever" with ABC's production problems this summer (BD 7/2/99). Declares, "we all agreed it was the appropriate time to talk again." Brock says price is "fair for both buyer and seller. We're paying full value."

Turner. Future CEO of combined bottling operation tells BD: "My focus will be to provide new direction on where we want to go and how we get there. I'll be focusing on customers, customer service and customer execution." Adds, "I'll also be addressing operational issues." Asked about ABC, Turner notes: "It has tremendous potential, both as to resources and brand portfolio, but the system hasn't been fully tapped to accomplish its full potential."

Scope. For 12 months ending June 30, combined ABC-Turner pro forma revenues were $1.68 bil. ABC operates in 15 midwestern states; Dr Pepper Turner in Texas, California, Nevada, Oklahoma and New Mexico. New bottler will be largest independent in US (see Green Sheet map showing combined territory and other data). Cadbury says combined operation will handle 24% of its overall volume.

Management. Jim Turner widely regarded as one of best US operators. Last year, Turner was courted by Pepsi for possible role in Pepsi Bottling Group (BD 8/7/98). At present, ABC is run by Cadbury veteran Richard Beardon, who is regarded as good manager but lacking experience as US bottler. Turner has been referred to by some as "the Henry Schimberg of the third tier"; reference is to highly-regarded CEO of CCE. Several executives say Turner will help ABC operations, which faced production problems this past summer. Others say ABC's problems were one-time consolidation pains, are largely over and that Turner's contribution will be in bottler "street smarts" and customer relations.

This and all past issues of Beverage Digest are for sale.
Please call (914) 244-0700 for more information.
Can't find the article you're looking for?
Click here to e-mail inquiries to our editors.