McKesson Corp., which pulled out of the huge Southern California liquor market a dozen years ago, said Tuesday that it plans to sell off its remaining wine and spirits businesses.
The divestiture continues an effort by the San Francisco company to sharpen its focus as one of the nation's leading distributors of drugstore products and non-food items sold in supermarkets and by other mass marketers. McKesson already has shed its food, home building and chemical operations.
"In addition, we will, of course, continue to expand our business in bottled water, automotive-appearance products and prescription drug benefits management," Thomas W. Field Jr., McKesson's president and chief executive, said in a statement. The company's water division produces Sparkletts, Alhambra and Crystal brands for sale throughout the West.
The deal announced Tuesday involves sale of McKesson Wine & Spirits to some of the division's top executives and the New York investment firm of Weiss, Peck & Greer. McKesson will receive an unspecified amount of cash and notes, and a minority interest in the new entity, Sunbelt Beverage Co.
McKesson Wine & Spirits, which had sales of $540 million for the fiscal year ended March 31, distributes hundreds of brands nationally and operates 11 wholesale houses in eight states.
McKesson said it will also put up for sale the remaining elements of its one-time wine and liquor empire. These include two New York-based subsidiaries--"21" Brands, which markets imported wines and domestic spirits, and Carlton Importing Co., which markets St. Pauli Girl beer from West Germany. Those operations had annual revenue of nearly $200 million.
"The planned sale of our wine and spirits operations will allow McKesson to complete a massive and orderly restructuring of its business--an effort that began in 1980, long before restructuring became a corporate cliche," Field said. He said the company raised about $400 million from that effort, and has reinvested $600 million in new businesses.