Breakthru Beverage Group, the alcohol wholesale company that has its Illinois operation based in Cicero, is planning to merge with Texas-based Republic National Distribution Co. to form the second largest alcohol distributor in the U.S., the companies announced Monday.
It would be the the second major tie-up in recent years for the Wirtz family alcohol distribution business, which dates to 1945. Last year, Wirtz Beverage joined forces with New York-based Charmer Sunbelt to form Breakthru Beverage. In merging with Republic National, the newly formed entity would distribute beer, wine and spirits to 27 states and Canada, with projected annual sales of about $12 billion.
The two companies announced Monday they signed a letter of intent to combine their assets and operations, a transaction that is expected to close in the second quarter of next year pending regulatory approval. No financial terms or details on ownership structure were disclosed.
“Breakthru looks forward to joining forces with (Republic National) to establish an even stronger foundation of industry knowledge, talent, history and heritage. We see this as the launch pad to bring innovation to life and to usher in a new era for our business and industry,” Breakthru CEO Greg Baird said in a news release.
Certainly, such a merger could help both companies compete against Southern Glazer’s Wine & Spirits, the largest alcohol wholesaler in the U.S. after Miami-based Southern Wine & Spirits of America and Texas-based Glazer’s merged last year.
Bacardi left Breakthru and other distributors last year, taking its $1 billion distribution business to Southern Glazer, a significant hit at the time for the newly formed Breakthru.
“I think this move balances the power at the top of the food chain,” said Emily Pennington, managing editor for the trade publication Wine & Spirits Daily.
It’s also another chapter for the Wirtz family alcohol distribution business, which has proven more lucrative over the years than the family’s hockey team — the Blackhawks — real estate holdings or insurance business.
Blackhawks Chairman Rocky Wirtz, also co-chairman of the board of directors for Breakthru Beverage, would serve on the new company’s board. So would his son Danny Wirtz, who would also become the chief growth and strategy officer for the combined business.
Tom Cole, currently president of Republic National Distribution Co., would serve as CEO of the new company.
In some markets — such as Colorado, Florida, Maryland, South Carolina, Virginia and Washington, D.C. — Breakthru and Republic National are currently competitors and likely would need to consolidate some operations.
That’s not the case in Illinois, where Breakthru employs almost 1,200 people, according to a Breakthru spokesman, who said the merger won’t have any impact on the Illinois workforce.
Twitter @GregTrotterTrib
