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Bottles of Coca-Cola are seen in a warehouse at the Swire Coca-Cola facility in Draper, Utah.GEORGE FREY

In sports circles, Larry Tanenbaum is known as the public face of ownership for Toronto's basketball, hockey and soccer teams, as chairman of Maple Leaf Sports & Entertainment Ltd.

In the private-equity world, Mr. Tanenbaum is known as a low-profile, canny investor who built a billion-dollar fortune off paving, cable and cookie-dough companies.

Now the 72-year-old's sports and business interests are coming together, as Mr. Tanenbaum has joined forces with former NBA player Ulysses (Junior) Bridgeman and announced one of his largest investments, the acquisition of Coca-Cola Co.'s Canadian bottling and distribution network. The deal is expected to close in September and while terms are confidential, sources in the U.S. beverage industry say the pair will pay approximately $800-million for the business.

The two investors are jumping on an opportunity born out of a strategic shift at Atlanta-based Coca-Cola, which is selling off North American bottling operations to focus on product development and marketing, after seeing revenues go flat and its stock price underperform that of rivals over the past five years.

Coca-Cola's Canadian network includes five production facilities, more than 50 distribution centres and 5,800 employees. Those with long memories will recall that Mr. Tanenbaum and Mr. Bridgeman are buying a business that the U.S. parent took private in 1997, in a transaction that valued the business at $890-million.

Over the past year, Coca-Cola moved quickly to auction off its U.S. bottlers; the company found a buyer for its final U.S. territory in October. The Canadian operations proved more difficult to move: Sources in the U.S. beverage industry said that, historically, the business here was less profitable than U.S. units because beverages are being delivered to smaller population centres, spread out over longer distances.

Mr. Tanenbaum said in an e-mail that the 50 investment professionals at Kilmer Group, his family-controlled investment company, spent several years "searching for a large-scale business in which we could apply our entrepreneurial energy and which we could love and nurture with a multigenerational perspective."

The fact that Mr. Tanenbaum was looking for a "multigenerational" commitment was critical to winning the auction, which attracted at least three other bidders, according to sources. Coca-Cola will continue to be a supplier and partner to the Canadian business after this deal is done.

Kilmer has been quietly working with Coca-Cola for a year, and one of the people Mr. Tanenbaum tapped for advice early in the process was Mr. Bridgeman, who the co-owner of the NBA's Toronto Raptors was introduced to years ago by long-time basketball executive Wayne Embry. A partnership flowed from that conversation.

Mr. Bridgeman brings deep ties to the makers of the Real Thing. The Louisville, Ky.-based entrepreneur played basketball for the Milwaukee Bucks and L.A. Clippers in the 1970s and 1980s, an era before rising TV revenues fuelled massive NBA salaries. Mr. Bridgeman made US$350,000 in his best year in the league.

During his 12-year pro sports career, Mr. Bridgeman bought three Wendy's franchises. The investment did well and Mr. Bridgeman subsequently snapped up more fast-food outlets, eventually owning more than 300 restaurants for a variety of chains. Over the years, Coca-Cola was both a supplier and sponsor of Mr. Bridgeman's basketball camps.

Like Mr. Tanenbaum, the 64-year-old Mr. Bridgeman keeps a relatively low profile. But Forbes magazine estimates that he is among America's most financially successful former athletes, with a $600-million (U.S.) fortune and annual income that exceeds better-known jocks such as Jack Nicklaus and Earvin (Magic) Johnson.

Over the past two years, Mr. Bridgeman sold his restaurant holdings to buy into Coca-Cola's bottling network. Working with his sons, he acquired territories in Kansas, Missouri and southern Illinois through a company called Heartland Coca-Cola, in a deal that closed a year ago. Norman Ross, a Heartland executive, said in an interview the company is expanding sales by selling retailers and restaurants more products from Coca-Cola's 500-brand portfolio, which includes Powerade sports drinks and Dasani bottled water.

"We were fortunate to have been introduced to Junior Bridgeman," said Mr. Tanenbaum, whose firm will have 51 per cent of the venture. "Here was an opportunity to partner with a wonderful family who both shares our values and who are outstanding operators in the Coca-Cola system."

After the acquisition closes, Kilmer vice-chairman Ken Tanenbaum, son of Larry Tanenbaum, will become executive chairman of Coca-Cola's domestic bottling business. In an interview, Ken Tanenbaum said the new owner's strategy is to boost sales by working closely with store owners and other sales channels. He said: "There's a revolution playing out in retailing, and the customer will tell us where they want products. Our job is to always be an arm's length from desire."

An early priority is boosting distribution in Quebec. Ken Tanenbaum said Kilmer's analysis shows Coca-Cola is underrepresented in the province. He said: "There's a definite benefit to local ownership. Coca-Cola believes that, and we believe that." While it's possible over time to ramp up Coca-Cola's Canadian network by bottling or distributing beverages from other suppliers, with permission from the Atlanta-based parent, he said that's not part of Kilmer's strategy.

Larry Tanenbaum's sports franchises are on winning streaks. Fans saw the team owner grinning from ear-to-ear as football's Toronto Argonauts (which MLSE bought into in December) and soccer's Toronto FC hoisted trophies last season. The Toronto Raptors and Maple Leafs are both riding high as they head into the playoffs.

Mr. Tanenbaum has to be hoping the hot streak continues for his latest big investment too.

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