Bergen shareholders approve Martini recapitalization plan

Drug Store News, Feb 20, 1989

Bergen shareholders approve Martini recapitalization plan

COSTA MESA, Calif. - Bergen Brunswig shareholders have approved a plan that would relinquish the founding family's control of the nation's second largest wholesaler.

Over the next five years, Emil Martini, Jr., chairman and ceo, and brother Robert, who serves as president, would exchange their Class B stock - which has separate voting powers - for Class A stock. The Martinis, who currently own most of the powerful Class B stock - which will eventually be eliminated - will then own approximately 13 percent of the common stock.

Some dissenting stockholders have filed a lawsuit over this recapitalization plan. Nevertheless, Bergen executives expect the program will become effective by late July.

The stock exchange plan provides for a "one share-one vote" democracy, Emil Martini, Jr. said at the recent annual meeting. He said the transformation would make it easier to run Bergen when the Martinis retire.

In discussing operations, he noted sales in the drug wholesaling division rose 12 percent to $3 billion last year, and operating earnings jumped 51 percent.

Bergen now has its technologically-advanced, 221,052-square-foot Valencia, Calif., distribution center running at full capacity. This year alone, Martini said the company will open three more new DCs, one of which will surpass Valencia's size and be capable of handling over $400 million in annual sales volume.

Besides improving margins through technology, Bergen is "constantly looking to improve" market share, Martini told Drug Store News.

Robert Martini added that Bergen may realize some gains because of its financial strength over wholesalers like Amfac and Alco - two companies still recovering from leveraged buyouts.

Bergen also expects it can increase business through expanded coverage in the country's Northeastern corridor, particularly metropolitan New York, said vp-public affairs Jack Fay.