Dr Pepper Snapple seeks to acquire Davis Beverage Group, Davis Bottling Co.

Move would nearly double DPS’s company-owned distribution in Pa., add glass package manufacturing capabilities

September 5, 2014

Dr Pepper Snapple Group (DPS), Plano, Texas, signed a non-binding letter of intent to acquire the business assets of Davis Beverage Group and Davis Bottling Co. If completed, the acquisition would include most of Davis’ direct-store-delivery territory in Pennsylvania and a portion of its New Jersey territory as well as its production and distribution facilities, delivery vehicles, vending equipment and other assets.

Based in Bethlehem, Pa., Davis Beverage Group distributes a wide range of DPS’s brands —including 7UP, Snapple, A&W, Canada Dry and Sunkist, among others — to a 42-county territory covering most of the eastern half of Pennsylvania, excluding the Philadelphia area, and western and central New Jersey. Davis also carries a number of other non-carbonated products, including several third-party brands that already have significant distribution agreements with DPS such as Bai Brands’ Bai5, Fiji Water Co.’s Fiji, All Market Inc.’s Vita Coco and Neuro drinks’ Neuro.

In addition to bottling carbonated soft drinks in a wide range of PET package sizes, Davis Bottling Co. currently packages IBC, Stewarts and Crush beverages in glass bottles and Orangina in 1.75-liter PET bottles for DPS on a contract basis.

Larry Young, president and chief executive officer of DPS, said the proposed acquisition would build on the company’s efforts to strengthen its route to market, improve operating efficiency, and leverage its integrated business model.

“Davis has proudly served customers and consumers for more than 70 years and been a great partner to us both as a distributor of our brands and as a contract manufacturer,” Young said in a statement. “We’re excited about the possibility of building on their great heritage while nearly doubling our direct-store-delivery footprint in Pennsylvania and adding their glass bottling capabilities.”

DPS and Davis have begun due diligence and hope to complete the sale in the fourth quarter of this year. The financial terms of the transaction will not be disclosed; however, any final agreement will not have a material impact on DPS’s financial statements.

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