FDBusiness.com

Italian drinks producer Gruppo Campari is acquiring the Carolans, Frangelico and Irish Mist brands from William Grant & Sons, the Scotch whisky distiller. The acquisition reinforces Campari’s position as a fast growing company in the US and key international premium spirits markets.

The enterprise value of the acquired business is Eur128.2m, corresponding to 7.5 times the pro forma EBIDTA 2009 (inclusive of the distribution margins of the Frangelico brand in the US). The transaction is expected to close on October 1st 2010 and the consideration will be fully self-financed. Overall the acquired business is expected to contribute about 1 million nine-litre cases and net sales of Eur50m on an annual basis.

Bob Kunze-Concewitz, chief executive of Campari.

“With Carolans, Frangelico and Irish Mist we add a high-quality and profitable business with upside potential and further enhance the group’s premium offering. In particular, we increase our critical mass in the highly-profitable US market and strengthen our exposure to a number of key international markets, including Australia, Russia, Canada, Spain and the UK,” says Bob Kunze-Concewitz, chief executive of Campari. “This acquisition represents a perfect fit in our acquisition framework, in business and financial terms. Moreover, it will benefit from low risk and easy integration, as we already account for 60% of the acquired portfolio volume and we are the global source for Frangelico.”

The Carolans, Frangelico and Irish Mist brands only recently became part of the William Grant portfolio following the company’s Eur300m acquisition of the spirits and liqueurs business of Irish and UK cider maker C&C Group in July 2010. The acquisition netted William Grant Tullamore Dew, the world’s second largest Irish whiskey brand with sales of over 600,000 cases worldwide, which has now become the Scotch group’s sixth core brand.