A pair of Anheuser-Busch wholesalers in Maine are consolidating.
Oakland-based Valley Distributors this week announced plans to acquire Lewiston-based Federal Distributors.
Specific financial terms of the transaction, which is expected to close during the first quarter of 2018, were not disclosed. Combined, the two companies — which will now operate under the newly created “Valley Beverage” name — will distribute upwards of 4 million cases of beer in 2017.
In a conversation with Brewbound, Valley Beverage president Michael Runser said the acquisition would make Valley Beverage “more appealing to suppliers” and give the company a bigger foothold within the craft beer segment while ensuring its “long-term viability” within the beer industry.
“We will be able to provide better service to our customers and give our employees greater opportunities,” he said.
The two companies have about 90 percent portfolio alignment, he added.
In addition to A-B products and non-alcoholic offerings, Federal Distributors sells a variety of craft beers throughout the greater Lewiston region, including offerings from Maine’s largest craft brewery, Shipyard, as well as Jack’s Abby, Long Trail, Otter Creek, 21st Amendment and Stony Creek, among others.
Except for Shipyard, Valley Beverage previously sold all of the above-mentioned brands in its territory.
In a press release, Valley Beverage said it would maintain Federal’s distribution facility in Lewiston as well as its own shipping center in Oakland.
As a result of the acquisition, Valley Beverage will roughly double the geographic footprint it services. It will also give the company access to a population base of approximately 340,000.
Founded in 1947, Federal Distributors has grown to 70 employees and distributes approximately 2 million cases of product annually, according to its website. In addition to selling more than 200 beer SKUs, the company also distributes about 200 non-alcoholic SKUs and has over 60 percent market share within its territory.
“Federal Distributors has been a family success story for more than 70 years,” John Cronin, the company’s president, said via the release. “After careful consideration, we decided that Valley Beverage was the best company to assume ownership.”
As of press time, it’s unclear if jobs would be lost as a result of the merger.
“It is our intention that the vast, vast majority of people will be kept on board,” Runser said, adding that any changes would be “extremely minimal.”
Valley Beverage is also planning to invest in an expansion at Federal’s Lewiston warehouse during the first quarter of 2018, Runser said.
The transaction was financed through a combination of bank debt and operating cash flow. Ippolito Christon & Co. served as the financial advisor to Valley Beverage while Ettelman & Hochheiser, P.C. represented the legal interests of the company.