Sara Lee Sells Assets of Shasta Beverage Unit

The assets of Sara Lee Corp.’s Shasta Beverage division, the nation’s seventh-largest soft-drink company, have been sold to a company controlled by Burnup & Sims and its chief executive.

Headquartered in Hayward, Calif., Shasta cans and bottles more than 30 flavors at 11 plants nationwide. Last year it had annual revenue in excess of $300 million.

In recent years, the soft-drink brand has made an attempt to compete in the fiercely competitive national market but has been hampered by its mostly regional distribution network.

It began portraying itself as a jazzy, trendy brand, but it still had a tough time competing in the heated marketing war led by the nation’s No. 1 and No. 2 soft-drink companies: Atlanta-based Coca-Cola and Purchase, N.Y.-based Pepsico.

Began Looking in August

Last year, Shasta’s unit volume declined 7% from 1983. And, in its most recent annual report, Shasta’s parent company blamed “promotional activity in connection with the introduction of competitors’ new products (as) a major factor in Shasta Beverages’ loss of volume and market share.”

Sara Lee announced in August that it was looking for a buyer for Shasta.

With this deal, Sara Lee’s Shasta unit will receive securities that can be converted into about 17% of Burnup & Sims’ common stock.

Fort Lauderdale, Fla.-based Burnup & Sims said Shasta’s assets were acquired through National Beverage Corp., a newly formed corporation. A partnership headed by Nick A. Caporella, president and chief executive of Burnup & Sims, owns a majority of the common stock of National Beverage. In addition, Burnup & Sims owns 40% of National Beverage’s stock.

Burnup & Sims has guaranteed, under certain circumstances, that Shasta will receive a minimum average value of $10 in open market sales of its Burnup & Sims common stock during the second year following the closing of the deal.