COCA-COLA BOTTLING CO. CONSOLIDATED (NASDAQ:COKE) Files An 8-K Entry into a Material Definitive Agreement
Item1.01.
| Entry into a Material Definitive Agreement. |
First Amendment to Final Comprehensive Beverage
Agreement. In connection with the closing under the
Distribution APA described in Item2.01 below, on April28, 2017,
Coca-Cola Bottling Co. Consolidated (the Company), The
Coca-Cola Company and Coca-Cola Refreshments USA, Inc.
(CCR), a wholly-owned subsidiary of The Coca-Cola Company,
entered into an amendment (the CBA Amendment) to the final
comprehensive beverage agreement among them dated March31, 2017
(as amended, the Final CBA) to add the April 2017
Territory (as defined in Item2.01 below) to the territories
covered under the Final CBA for which CCR has granted the Company
exclusive rights to distribute, promote, market and sell the
Covered Beverages and Related Products distinguished by the
Trademarks (as those terms are defined in the Final CBA) in
exchange for the Company agreeing to make a quarterly
sub-bottling payment to CCR on a continuing basis, based on sales
of certain beverages and beverage products that are sold under
the same trademarks that identify a Covered Beverage, Related
Product or certain cross-licensed brands. A summary of the Final
CBA is provided in the Companys Current Report on Form8-K filed
with the Securities and Exchange Commission (the SEC) on
April4, 2017 (the April 2017 Form8-K), and the Company
will file the Final CBA with its Quarterly Report on Form 10-Q
for the first quarter of 2017 (the Q1 2017 Form 10-Q).
First Amendment to Final Regional Manufacturing
Agreement. In connection with the closing under the
Manufacturing APA described in Item2.01 below, on April28, 2017,
the Company and The Coca-Cola Company entered into an amendment
(the RMA Amendment) to the final regional manufacturing
agreement among them dated March31, 2017 (as amended, the
Final RMA) to add the Twinsburg Facility (as defined in
Item2.01 below) to the regional manufacturing facilities covered
under the Final RMA for which The Coca-Cola Company has granted
the Company the rights to manufacture, produce and package
Authorized Covered Beverages (as defined in the Final RMA) for
distribution by the Company for its own account in accordance
with the Final CBA and for sale by the Company to certain other
U.S. Coca-Cola bottlers and to the Coca-Cola North America
division of The Coca-Cola Company in accordance with the Final
RMA. A summary of the Final RMA is provided in the April 2017
Form8-K, and the Company will file the Final RMA with the Q1 2017
Form 10-Q.
The foregoing
descriptions of the CBA Amendment and the RMA Amendment are
qualified in their entirety by reference to the full text of such
agreements and all exhibits thereto, which will be filed with the
Companys Quarterly Report on Form 10-Q for the fiscal quarter
ending July2, 2017.
| Item2.01. |
Completion of Acquisition or Disposition of Assets. |
On April28, 2017,
the Company completed the acquisition from CCR of the following
(the April 2017 Acquisitions):
|
distribution assets that included (i)rights to distribute certain cross-licensed brands distributed by CCR in territories located in northern Ohio served by distribution facilities located in Akron, Elyria, Toledo, Willoughby and Youngstown, Ohio (the April 2017 Territory), and (ii)other assets used by CCR in the distribution of the cross-licensed brands and of The Coca-Cola Company brands, as contemplated by a distribution asset purchase agreement dated April13, 2017 between the Company and CCR, a copy of which was filed with the SEC on April17, 2017 (the Distribution APA); and |
|
a regional manufacturing facility located in Twinsburg, Ohio (the Twinsburg Facility) and related assets, as contemplated by a manufacturing asset purchase agreement dated April13, 2017 between the Company and CCR, a copy of which was filed with the SEC on April17, 2017 (the Manufacturing APA). |
The April 2017
Acquisitions are the latest in a series of previously-announced
transactions the Company has engaged in with The Coca-Cola
Company and CCR as part of The Coca-Cola Companys plans to
refranchise its North American bottling territories, by which the
Company has significantly expanded its distribution and
manufacturing operations. In addition to the April 2017
Acquisitions, the Company has closed the following acquisitions
with CCR in fiscal 2017 (together with the April 2017
Acquisitions, theAcquired Business):
|
on January27, 2017, the Company acquired distribution assets that included rights to distribute certain cross-licensed brands distributed by CCR in, as well as the assets used by CCR in the distribution of the cross-licensed brands and of The Coca-Cola Company brands in, territories served by distribution facilities in Anderson, Fort Wayne, Lafayette, South Bend and Terre Haute, Indiana; and |
|
on March31, 2017, the Company acquired (i)distribution assets that included rights to distribute certain cross-licensed brands distributed by CCR in, as well as the assets used by CCR in the distribution of the cross-licensed brands and of The Coca-Cola Company brands in, territories served by distribution facilities in Indianapolis and Bloomington, Indiana and Columbus and Mansfield, Ohio, and (ii)two regional manufacturing facilities located in Indianapolis and Portland, Indiana and related manufacturing assets. |
None of the
acquisitions of the Acquired Business individually were
significant under Rule 3-05 of Regulation S-X and Item2.01 of
Form 8-K; however, as a result of the April 2017 Acquisitions,
the Acquired Business now is significant under Rule 3-05 of
Regulation S-X and Item2.01 of Form 8-K. The Company paid
approximately $228.0 million in the aggregate (after certain
adjustments and subject to further post-closing adjustments) for
the Acquired Business, which was the result of the application of
valuation principles which are customary in the soft drink
industry (e.g., application of an EBITDA multiple to determine
the brand business values and the use of net book values for the
distribution and manufacturing assets and working
capital).
The foregoing
descriptions of the Distribution APA and the Manufacturing APA
are qualified in their entirety by reference to the full text of
such agreements and all exhibits thereto, which are filed as
Exhibit 2.1 and Exhibit 2.2, respectively, to this Current Report
on Form 8-K and incorporated herein by reference.
Important
Warning Regarding the Information in the Distribution APA and the
Manufacturing APA and the Exhibits to Such Agreements.
The Distribution APA and the Manufacturing APA, including any
exhibits to these agreements, have been included to provide
investors with information regarding their terms. There are
representations and warranties contained in these agreements
which were made by the respective parties to each other as of
specific dates. The assertions embodied in these representations
and warranties were made solely for purposes of each such
agreement and may be subject to important qualifications and
limitations agreed to by the respective parties in connection
with negotiating their terms (including qualification by
disclosures that are not necessarily reflected in these
agreements). Moreover, certain representations and warranties may
not be accurate or complete as of any specified date because they
are subject to a contractual standard of materiality that is
different from certain standards generally applicable to
stockholders or were used for the purpose of allocating risk
between the respective parties rather than establishing matters
as facts. Based upon the foregoing reasons, you should not rely
on the representations and warranties as statements of factual
information. In addition, information concerning the subject
matter of the representations and warranties may change after the
date of each such agreement, which subsequent information may or
may not be reflected in the Companys public disclosures.
Investors should read the Distribution APA and the Manufacturing
APA, as well as all exhibits to these agreements, together with
the other information concerning the Company, The Coca-Cola
Company and CCR that each company or its affiliates publicly
files in reports and statements with the SEC.
Relationship between
the Parties. The business of the Company consists
primarily of the production, marketing and distribution of
nonalcoholic beverage products of The Coca-Cola Company in the
territories the Company currently serves. Accordingly, the
Company engages routinely in various transactions with The
Coca-Cola Company, CCR and their affiliates. The Coca-Cola
Company also owns approximately 34.8% of the outstanding common
stock of the Company, which represents approximately 4.9% of the
total voting power of the Companys common stock and class B
common stock voting together. The Coca-Cola Company also has a
designee serving on the Companys Board of Directors. For more
information about the relationship between the Company and The
Coca-Cola Company, see the description thereof included under
Related Person Transactions in the Companys Notice of Annual
Meeting and Proxy Statement for the Companys 2017 Annual Meeting
of Stockholders filed with the SEC on March20, 2017.
| Item9.01. | Financial Statements and Exhibits. |
| (a) | Financial Statements of Businesses Acquired. |
The Company will
file financial statements with respect to the Acquired Business
for the periods specified in Rule 3-05(b) of Regulation S-X by
amendment to this Current Report on Form8-K no later than 71
calendar days after the date that this Current Report was
required to be filed.
| (b) | Pro Forma Financial Information. |
The Company will
file pro forma information with respect to the Acquired Business
for the periods specified in Rule 3-05(b) of Regulation S-X by
amendment to this Current Report on Form8-K no later than 71
calendar days after the date that this Current Report was
required to be filed.
| (d) | Exhibits. |
|
ExhibitNo. |
Description |
Incorporated By Reference To |
||
| 2.1 |
Distribution Asset Purchase Agreement, dated April13, 2017, by and between the Company and Coca-Cola Refreshments USA, Inc. |
Exhibit 2.1 to the Companys Current Report on Form 8-K filed on April17, 2017 (File No. 0-9286). |
||
| 2.2 |
Manufacturing Asset Purchase Agreement, dated April13, 2017, by and between the Company and Coca-Cola Refreshments USA, Inc. |
Exhibit 2.2 to the Companys Current Report on Form 8-K filed on April17, 2017 (File No. 0-9286). |
|
Certain schedules and similar supporting attachments to this agreement have been omitted, and the Company agrees to furnish supplemental copies of any such schedules and similar supporting attachments to the Securities and Exchange Commission upon request. |
About COCA-COLA BOTTLING CO. CONSOLIDATED (NASDAQ:COKE)
Coca-Cola Bottling Co. Consolidated produces, markets and distributes nonalcoholic beverages, primarily products of The Coca-Cola Company, which include beverage brands. The Company is an independent Coca-Cola bottler in the United States. The Company’s segments are Nonalcoholic Beverages and All Other. The Company holds various agreements, under which it produces, distributes and markets sparkling beverages of The Coca-Cola Company, as well as still beverages of The Coca-Cola Company, such as POWERade, vitaminwater, Minute Maid Juices To Go and Dasani water products, and various other products, including Dr Pepper, Sundrop and Monster Energy products. Its operational footprint includes markets located in North Carolina, South Carolina, South Alabama, South Georgia, Central Tennessee, Western Virginia and West Virginia. It develops, markets and distributes certain products, which it owns, such as Tum-E Yummies, a vitamin-C enhanced flavored drink, and Fuel in a Bottle power shots. COCA-COLA BOTTLING CO. CONSOLIDATED (NASDAQ:COKE) Recent Trading Information
COCA-COLA BOTTLING CO. CONSOLIDATED (NASDAQ:COKE) closed its last trading session down -2.65 at 207.00 with 38,727 shares trading hands.
