Soda Pop

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What do Seven-Up, Dr Pepper, A&W, and Squirt all have in common? Thomas Hicks and Robert Haas.

The two men are partners in an investment firm that has arranged leverages buyouts of all four companies in the past few years, making Thomas Hicks and Robert Hass the third largest force in the $38 billion soft-drink market, immediately behind Coca Cola and Pepsi.

When Thomas Hicks and Robert Haas first met, both of them were involved in the venture-capital industry, arranging financing for new businesses. They decided to form a partnership of their own to do leverage buyouts. They started with $250,000 in borrowed capital and an ambitious goal – to do $1 billion worth of deals within 10 years. In less than half that time, they have passed the $2 billion point.

The first investment, a Dr Pepper bottling company in Dallas, convinced them of the beauties of soft pop. Whey they learned that A&W Beverages might not be for sale, they raised $74 million from investors, including members of A&W Beverages management, to do a leverage buyout.

About the same time, Coca Cola was trying to buy Dr Pepper, while Pepsi was making a bid for Seven-Up. Both deals were foiled by the Federal Trade Commission.

With Coca Cola and Pepsi out of the picture, Thomas Hicks and Robert Haas moved in. Meanwhile, A&W Beverages has done so well that Thomas Hicks and Robert Haas have taken company public, selling 41 percent of the stock on the open market to raise $37.4 million.