Drinks Americas Holdings, a Connecticut-based beverage production and distribution company, has entered into a letter of intent to purchase Worldwide Beverage Imports (WBI).

The company plans to buy around 1,000,000 shares of the WBI’s common stock in return of assignment and assumption of contract and sales right to WBI’s licensed brands, WBI’s sales rights in California, WBI’s lease for warehouse facilities and a right of first refusal to purchase the assets of Fabrica de Tequilas Finos, Cerveceria Mexicana and Cerveceria Azteca.

The transaction will allow Drinks Americas to add up to $2m from the sales of tequila in California region, which was not included under the present contract between the two companies.

Drinks Americas CEO Patrick Kenny said closing this transaction will have the immediate impact of potentially increasing their gross margins, enhancing their potential profitability and immediately adding up to $2m in revenue from the additional California sales revenue to their overall national business model.

"The transaction, once completed, will impact Drinks Americas’ size, scale, potential profitability, and will add a large west coast sales and distribution center," Kenny said.

Drinks Americas had been in sales, distribution and licensing agreement with WBI since June 2011 and is selling and distributing KAH Tequila, Agave 99 Tequila, Rio Bravo Beer, Crazy Pig Mexican Ale and Chili Devil Beer.

The company also markets Willie Nelson’s Old Whiskey River Bourbon and Olifant Vodka, and owns and distributes Rheingold Beer.