Private Investment Firm to Acquire Silver Eagle Distributors’ Houston Territory

Middle-tier consolidation continued this week as Houston-based Silver Eagle Distributors today announced that it would sell a portion of its business to Redwood Capital Investments.

In a press release, the beer wholesaler, which is the largest independent distributor of Anheuser-Busch products in the U.S., said it had agreed to a deal that would give Redwood control over three Texas counties — Ft. Bend, Montgomery and a significant portion of Harris.

Terms of the deal were not disclosed, but it will include Silver Eagle’s Houston corporate offices and warehouse, as well as the warehouse operations in Conroe, Cypress, Rosenberg and Pasadena, the press release noted.

Silver Eagle Chairman and CEO John L. Nau III will retain ownership of a separate 13-county territory that “includes San Antonio and the surrounding communities,” according to the release.

On its website, Redwood Capital Investments describes itself as a private investment company for Jim Davis, the co-founder of Allegis Group, the largest staffing company in the U.S. In 2017, the firm invested in Chicago’s Lakeshore Beverage, another Anheuser-Busch wholesaler.

“Redwood is the ideal group to acquire the Houston-area territory,” Nau said via the release. “They are committed to excellence and future growth and as a current member of the Anheuser-Busch wholesaler family have a clear understanding of the business.”

Silver Eagle executives Bob Boblitt and John Johnson will remain in leadership roles following the closing of the deal, the release stated.

Silver Eagle, the second largest independent beer distributor in the U.S., employs 1,500 people and services more than 13,500 accounts, according to its website.

In addition to distributing Anheuser-Busch products, the company also sells offerings from Constellation Brands, FIFCO USA, Mark Anthony Brands, Firestone Walker, Bell’s Brewery and Saint Arnold Brewing Company, among others. It also distributes a variety of non-alcoholic products, including Red Bull, Essentia Water, and drinks from Arizona Beverage Co., among others.

According to the Houston Chronicle, Silver Eagle generated $1.1 billion in revenue in 2017.

Earlier this month, two MillerCoors wholesalers – Ajax Distributing and BarDett Distributing — consolidated operations in Memphis, Tennessee.

In February, Reyes Beverage Group’s Harbor Distributing acquired the assets of Central Coast Distributing in Santa Maria, California. That same month, Fresno, California-based Donaghy Sales purchased Delta Sierra Beverage.

Three other distributor deals were struck in January in Pennsylvania, Minnesota, and Oregon.

27 distributor deals were completed in 2018, according to Ippolito Christon & Co., an advisory firm.

A press release with additional information on the Silver Eagle sale is below.

Silver Eagle Distributors to Sell Houston Territory to Redwood Capital Investments

Houston (March 22, 2019) – Silver Eagle Distributors, L.P., the nation’s largest independent distributor of Anheuser-Busch beverages, today announced it has signed an agreement for Redwood Capital Investments to acquire all assets of Silver Eagle Distributors’ Houston-area territory which includes three counties: Ft. Bend, Montgomery and a significant portion of Harris. Completion of the transaction is subject to regulatory approvals and other customary closing conditions.

Silver Eagle Distributors is responsible for sales, marketing and distribution of Anheuser-Busch, Grupo Modelo and a wide variety of beverages to include domestic and import brands, microbrews and craft beers, craft spirits and several non-alcohol beverages and waters throughout 16 counties in Texas.

John L. Nau, III is chairman and CEO of Silver Eagle Distributors, L.P. Nau began his association with Anheuser-Busch in 1984 in Homestead, Florida. In 1987, Nau moved to Houston as a partner in the acquisition of Southwest Distributing, which became Silver Eagle Distributors in 1990. In 2007, Silver Eagle Distributors acquired the 13-county territory that includes San Antonio and the surrounding communities.

“We are very excited to have entered into this business transaction with Redwood Capital Investments and look forward to moving into the final stages of the agreement,” said John L. Nau, III, chairman and CEO, Silver Eagle Distributors. “Redwood is the ideal group to acquire the Houston-area territory. They are committed to excellence and future growth and as a current member of the Anheuser-Busch wholesaler family have a clear understanding of the business.”

Nau informed Silver Eagle employees that Bob Boblitt, president and John Johnson, executive vice president for sales and marketing will continue in leadership roles with the new company. The Redwood Capital acquisition will include the Houston corporate offices and warehouse as well as the warehouse operations in Conroe, Cypress, Rosenberg and Pasadena. The company will continue to operate as Silver Eagle Distributors.

”Redwood is excited to work closely with the Silver Eagle team to grow its business and continue the legacy of Mr. Nau. We intend to continue delivering our customers, suppliers and the greater Houston community with best-in-class service, while promoting an exciting environment for our employees,” said Ryan Mostrom, Principal at Redwood Capital Investments.

“Redwood Capital Investments is a unique investment firm that acquires privately owned companies and is committed to maintaining and promoting the legacy of the previous business owners,” said Nau. “I think this dynamic new company will take beverage distribution in Texas to a whole new level.”

Silver Eagle Distributors’ 13-county San Antonio-area territory will remain under the current ownership and Nau will continue as president and CEO of Silver Eagle Distributors – San Antonio.

Redwood Capital is the investment firm for Jim Davis, founder of Allegis Group. Allegis Group is the largest staffing business in North America. Redwood became a member of the Anheuser-Busch wholesaler family in 2017, when they became an investor in Lakeshore Beverage located in Chicago.

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