Drinks Americas Holdings (“Drinks”), a leading developer and marketer of beverage products, has announced that it has entered into a letter of intent with Worldwide Beverage Imports (“Worldwide”), which will result in Worldwide acquiring up to a 49% interest in the Company. Worldwide will acquire 125,000,000 shares of common stock of the Company in exchange for sales and or importing and distribution rights of Worldwide products through a series of licensing agreements between the companies.
Worldwide will make a capital contribution in the Company of no less than $1.5 million, in addition to the shares of common stock for the distribution rights of each of the new products. After this transaction, Worldwide will have acquired an interest not to exceed 49% of the Company.
Federico Cabo, principal operator of Mexico’s third largest brewery, Cerveceria Mexicana, and seventh largest tequila distillery, Fabrica de Tequilas Finos, will join the board of directors of the Company. The current management team will enter into employment agreements with the company for terms of up to five years but no less than three years.
In anticipation of the transaction, Worldwide has commenced the assignment of licensing and distribution rights of 39 SKUs of products owned or licensed by Worldwide. They will provide the production resources for each of the products and will extend 120 days credit on the products. The final terms and conditions of the transaction are being negotiated and will be reflected in a definitive agreement, and are expected to come to a close no sooner than June 30th and no later than July 15th.
“The combination of the resources of both companies, our brands and our production resources should allow for the rapid growth of the Company,” said Federico Cabo. “We are very excited about the transaction and the forward plan for the companies.”
J. Patrick Kenny, CEO of Drinks, said “It goes without saying that Federico Cabo’s history of success in the beverage industry is a tremendous addition to our Company. The products and the resources in the combined companies will provide a significant platform and will position our Company for growth and expansion. The key hurdle for Drinks has been access to production capital in today’s debt markets. This transaction provides Drinks with production and inventory resources for both our existing and newly added products and strengthens the Company exponentially.”
Currently, Worldwide markets products produced by Fabrica de Tequilas Finos, the seventh largest independent tequila distillery in the world, including Kah Tequila, Agave 99 Tequila and Ed Hardy Tequila. They also market the beer products produced by Cerveceria Mexicana, the third largest brewery in Mexico, including Mexicali Beer, Rio Bravo Beer, Chili Beer and Red Pig Ale. The combined brands are expected to be distributed and marketed in all 50 states with Drinks acting as either importer and distributor or primary sales agent for the combined brands.
