Breakthru to Acquire RNDC's JV Stakes in JV Businesses in Indiana, Kentucky

Breakthru Beverage Group, LLC said it entered into a Letter of Intent to acquire Republic National Distributing Co., LLC’s (RNDC) interests in its joint venture businesses with National Wine & Spirits (NWS) in Kentucky and Indiana.

Upon closing of the transaction, Breakthru Kentucky and Breakthru Indiana will be fully integrated into the Breakthru family, expanding Breakthru’s operations to 18 states.

Although other media makes it sound as if Breakthru is gaining full ownership of the Indiana and Kentucky operations, it's not at all clear to us that this is so.

Notice, for one, the use of "interests," which came directly from the Breakthru press release. Second, we spent a little time poking around the NWS website which has no indication of any intent to surrender its interests in NWS. Third, if you read the quote from NWS CEO John Bakeer below, you'll see that he said BreakThru is "the best distributor to drive our business" forward. People don't use "our business" when they are selling out.

NWS was formed by Frank E. McKinney, an Indianapolis banker and Democratic power broker in 1934 just after the end of Prohibition. James E. LaCrosse purchased the company in 1973 and transformed it into a major Midwest distributor.

It entered into its initial partnership arrangement with RNDC in 2010. That partnership continues today. What happened to NWS? It evolved into a holding company, NWS Holdings Inc. National Wine & Spirits is one of its portfolio companies, but NWS Holdings also serves as a vehicle for venture and entrepreneurial investments in other industries. Its portfolio seems to be concentrated to health-related business, which makes sense since Indiana is headquarters of Eli Lilly and Cook Group. which is primarily involved in medical devices and serices, but also is active in property management and resorts. NWS also has positions in technology and education.

Breakthru Beverage Group’s CEO Tom Bené stated, “We’re incredibly excited about the opportunity to expand our footprint into two new states, Indiana and Kentucky, which reflects our continued commitment to thoughtful and strategic growth. We are also excited about the opportunity to partner with NWS as we integrate these businesses into the Breakthru family to further drive growth in these markets. We value the existing teams and intend to maintain the current employee structure as we evaluate the needs of our suppliers and customers.”       

NWS’ CEO John Baker said, “We believe Breakthru Beverage Group is the best distributor to drive our business in these two important markets. I am confident that, with Breakthru’s leadership, strong experience, and commitment to execution excellence, these businesses will be well-positioned for their next chapter of growth and sustained success.”

We've asked both BreakThru and NWS for clarification.