Grant agrees €129m sale of three former CC labels to Campari

SCOTTISH DRINKS group William Grant Sons has agreed to sell three liqueur brands to Italy’s Gruppo Campari for €129 million.

This deal comes just less than 12 weeks after Grant concluded the acquisition of the brands from Irish listed company CC in a €300 million transaction that also included Tullamore Dew Irish whiskey.

The sale of Irish Mist, Frangelico and Carolans – which are produced in Clonmel – is expected to take effect on October 1st.

There will be no job losses as a result of the transaction and bottling operations at Grant’s Clonmel site will be unaffected.

Gruppo Campari has signed a 10-year contract for Grant to provide blending and bottling for the liqueurs in Clonmel.

Grant’s chief executive Stella David said it had not been the company’s intention to sell the liqueur brands when it completed its transaction with CC in July.

“Campari provided us with a compelling offer in terms of the price they were willing to pay,” Ms David said yesterday. “It means we can release cash to focus in on doing things that are really important to us.”

She said the sale would allow Grant to put “more focus” behind Tullamore Dew and to invest in it “more aggressively”.

“It just made sense that we take advantage of it ,” Ms David added. “Tullamore Dew is the star brand for us.”

Gruppo Campari said the acquisition of the three liqueurs would be earnings accretive for the listed Italian company in year one.

The price paid is 7.5 times the 2009 Ebitda (earnings before interest tax depreciation and amortisation) of the Irish liqueurs. The acquired business is expected to contribute about one million nine-litre cases and net sales of €50 million a year.

Based in Milan, Gruppo Campari is the sixth-biggest branded spirits company in the world.

It has annual net sales of more than €1 billion and employs about 2,000 staff. The Italian company operates 13 manufacturing plants and owns four wineries. Its brands include Campari, Cinzano and Wild Turkey.

Commenting on its acquisition, chief executive Bob Kunze-Concewitz said: “With Carolans, Frangelico and Irish Mist we add a high-quality and profitable business with upside potential.

“In particular, we increase our critical mass in the highly profitable US market and strengthen our exposure to a number of key international markets.”