Berkshire Hathaway Inc. (BRK/A)’s McLane trucking unit, a supplier to retailers and restaurants, formed a venture with closely held Wirtz Corp. to take a stake in a wine, spirit and beer distributor.
The deal to invest in Missouri Beverage Co. is expected to be completed next month, according to a statement yesterday from the companies that didn’t disclose terms.
The agreement brings together McLane’s logistics expertise and Wirtz’s experience in the U.S. Midwest, Wirtz President W. Rockwell “Rocky” Wirtz said. The companies may expand their relationship based on results in Missouri, he said.
“You’ve got to crawl before you walk,” Wirtz said in a phone interview. “I don’t know what the future holds. But, if this works out, it doesn’t mean that we can’t work together going forward.”
The state of Missouri has about $800 million in gross wholesale wine and spirits sales, he said. Missouri Beverage has a “relatively small” portion of that total and will seek to expand with the know-how and investment from McLean and Wirtz Beverage Group, he said.
The deal fulfills part of a projection by Berkshire Chairman Warren Buffett last year that the trucking unit would build its business. McLane Chief Executive Officer Grady Rosier bought two alcoholic-beverage wholesale distributors in 2010 and last year acquired Meadowbrook Meat Co., a North Carolina-based business that supplies national restaurant chains.
“Grady runs a logistical machine second to none,” Buffett wrote in a 2012 letter to shareholder of Omaha, Nebraska-based Berkshire. “You can look for bolt-ons at McLane, particularly in our new wine-and-spirits distribution business.”
McLane, which Berkshire bought from Wal-Mart Stores Inc. in 2003 for about $1.5 billion, reported 2012 pretax earnings of $403 million, or about 1.1 cents for every dollar of sales. The unit gets about 30 percent of its sales from Bentonville, Arkansas-based Wal-Mart.
Wirtz Corp. was founded in 1926 in Chicago, according to its website. The company expanded from real estate into beverage distribution in the 1940s and now has more than $2 billion in annual revenue. Operations currently span banking to sports. Wirtz owns the National Hockey League’s Chicago Blackhawks and part of Chicago’s United Center arena. Wirtz Beverage has operations in Illinois, Iowa, Minnesota, Nevada and Wisconsin.
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