We wanted to know more about Coke Tullahoma’s recent sale of its Tennessee and Kentucky franchise territories to Great Lakes Coca-Cola, which is owned by Chicago-based soft drinks and beer distributor Reyes Holdings. So we called Marion Glover of Glover Capital, who served as financial advisor to one of the families that sold. Tullahoma, founded in 1906, is made up of two franchises covering 30 counties in Tennessee, west of Chattanooga, and Kentucky, south of Louisville. Tullahoma added the Kentucky territory in 1999 with the purchase of Coca-Cola Bottling Company of Elizabethtown. In recent years, Coke Tullahoma was owned 50/50 by two families related to the late Charles V. Holland, who purchased the bottling operation prior to WWII. According to Glover, one of the families had tried in recent years to sell its half of the business. However, potential suitors were consumed with Coke’s massive US refranchising and the subsequent integration of territory, Glover said. During that period, Reyes Holdings bought franchises centered in Illinois and California. When that process wound down, the dam broke. Reyes Holdings made an offer for the entire Tullahoma business, which the owning families accepted.
Perspective. The air may now be clear post-refranchising for more US Coke system consolidation as small third- and fourth-generation bottlers look to sell and Coke’s largest bottlers hunt for ways to expand their businesses, Glover predicts. Reyes Holdings may have been attracted to Tullahoma in part to get closer to independent MillerCoors distributors in the region. Reyes, the largest MillerCoors distributor in the US, recently acquired the Northern California distribution assets of Tennessee-based DBI Beverage, a top- 20 MillerCoors distributor.
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