A New York state judge has ruled that AriZona Beverage Company must pay about $1 billion to acquire the half of the company owned by co-founder John Ferolito, according to an article by Reuters.
Justice Timothy S. Driscoll of Nassau County reached the amount owed to Ferolito after finding that Beverage Marketing USA, Inc., the company that produces and distributes AriZona iced tea and its entities, were worth about $2 billion in 2010.
Reuters reports that Ferolito, who has established a trust for his son, had argued that the company was worth $3.2 billion, as evinced by offers from Tata Global Beverages Ltd., Nestlé S.A. and The Coca Cola Co. to purchase AriZona in the past. Don Vultaggio, the other co-founder and the chairman of AriZona, had said the company was worth about $426 million.
Driscoll said that further proceedings are needed to determine the exact amount owed and the terms and conditions of the transaction, and a hearing is slated for Nov. 3.
“We are grateful for today’s decision that draws years of protracted, unnecessary litigation to a close,” Ferolito’s attorney, Nicholas A. Gravante Jr., told Reuters.
Ferolito and Vultaggio, who started the business together in 1992 after years of working together as beer distributors, had reached an agreement in 1998 that would restrict the transfer of AriZona stock to exterior parties. In 2005, however, Ferolito began seeking a corporate sale. Vultaggio refused to permit this kind of transaction, leading Ferolito to court to block the restriction. Ferolito then opted to dissolve Beverage Marketing USA and Vultaggio chose to buy out the stake.
From sales data of multi-outlet and convenience stores in the category of canned and bottled ready-to-drink tea, AriZona recorded just shy of $885 million in dollar sales and a 28.33 percent market share over the past 52 weeks ending on Sept. 7, according to IRI, a Chicago-based market research firm. The company also sold more than $200 million in canned juice drinks over that period of time and is involved in several other beverage types, including coffee, enhanced water, lemonade and energy drinks.
Ferolito’s son, John Ferolito Jr., owes the state of New York nearly $5 million in taxes and ranks no. 8 on the state Department of Taxation and Finance’s latest list of delinquent taxpayers, according to a story run on Monday by The New York Post.
Neither AriZona nor Ferolito’s attorney were able to provide additional comment at this time.