Beam Enters Irish Whiskey Market With $95 Million Acquisition of Cooley Distillery
Beam, the US-based international spirits group, is entering the fast growing Irish whiskey category with the purchase of Cooley Distillery in Ireland. The purchase price for Cooley, the industry’s only remaining independent Irish whiskey distillery, is approximately $95 million on a debt-free basis.
Cooley owns and produces the Kilbeggan,Connemara, Tyrconnell and Greenore brands. It currently sells approximately 250,000 9-litre cases per year – divided among its brands, private label products and bulk sales to third-party customers – and has production capacity to support substantial future growth. Beam expects the acquisition to be earnings neutral in 2012 and increasingly accretive moving forward.
“Cooley is one of only three sources for Irish whiskey, and the only independent player, so this transaction is a unique and compelling high-return opportunity to enter one of the industry’s highest growth categories,” explains Matt Shattock, president and chief executive of Beam. “We see the opportunity to leverage our combination of scale with agility to further build consumer demand for Cooley’s award-winning brands, and to expand distribution off a relatively small base in key export markets for Irish whiskey across North America and Europe. Cooley’s brands and distilleries have a heritage that’s unmatched in the world of Irish whiskey, so they will be a great fit with our portfolio of brands with long and rich histories.”
John Teeling, chairman and founder of Cooley Distillery, comments: “Beam understands whiskey. They have the culture, experience and global strength to enable the Cooley portfolio of brands to reach their potential in the fast growing Irish whiskey category. The renaissance in Irish whiskey, most evident in the United States, is now spreading across the world. Through Beam, our brands, built on quality, will be introduced to a host of new consumers. I am certain that the marriage between Cooley and Beam will benefit all.”
With both grain and malt distilleries, Cooley is able to produce a complete range of Irish whiskey styles. The company’s Kilbeggan Distillery, opened in 1757, is reputed to be the world’s oldest distillery and produces Cooley’s flagship blended Irish whiskey. Cooley’s many accolades include being named European Spirits Producer of the Year for an unprecedented four consecutive years by the International Wine & Spirit Competition (2008-2011).
The Irish whiskey category grew 11.5% in 2010 to 4.86 million cases according to Impact Databank. The leading markets for Irish whiskey, according to Impact, are the United States, Ireland, the United Kingdom, France, South Africa and Germany.
The transaction is structured as a tender offer in which Beam will offer Cooley’s stockholders $8.25 in cash for each outstanding share of Cooley stock. The transaction is conditioned upon holders of at least 80% of Cooley’s outstanding stock accepting the offer and other customary closing conditions. Holders of over 75% of Cooley’s outstanding stock have irrevocably agreed with Beam to tender their shares in the offer. The parties expect to complete the transaction in the first quarter of 2012.
