C&C to Acquire Vermont Hard Cider Company for US$305 Million

The business being acquired is expected to generate circa US$15 million of EBITDA for the 12 months ending 31 December 2012. Including non---proprietary brands, which do not form part of the Transaction, the Business is forecast to generate circa US$23 million of EBITDA in the same period.

29 Oct 2012 --- C&C Group plc, a manufacturer, marketer and distributor of branded cider and beer, has conditionally agreed to acquire the Vermont Hard Cider Company LLC (VTHCC), an independent, premium, craft cider company in the United States (“US”), for a gross consideration of US$305 million (c. €233 million).

The US$305 million consideration will be funded using the Group’s senior credit facilities and cash resources. The business being acquired is expected to generate circa US$15 million of EBITDA for the 12 months ending 31 December 2012. Including non---proprietary brands, which do not form part of the Transaction, the Business is forecast to generate circa US$23 million of EBITDA in the same period. The Transaction is expected to be immediately earnings accretive. The Transaction is subject to notification and review under the US Hart---Scott---Rodino Antitrust Improvements Act and also subject to other customary completion conditions. It is anticipated that the Transaction will complete by the end of the Group’s current financial year.

−?VTHCC owns a leading US cider brand, Woodchuck, a well---invested cidery in Vermont and a national distribution platform
−?The Business is delivering strong net revenue and EBITDA growth and is immediately earnings accretive
−?Accelerates C&C’s growth prospects – increased exposure to the high growth US cider category which grew approximately 60%1 in the first six months of 2012
−?Compelling strategic and cultural fit – shared commitment to values, heritage and brand attributes
−?Proven management team retained to develop and grow the business
−?VTHCC CEO and CFO to become shareholders in C&C Group
−?C&C’s pro---forma net debt to EBITDA to be less than 1.0x; no impact on Group’s progressive dividend policy
Stephen Glancey, CEO of C&C Group, said: “C&C is delighted to announce its agreement to acquire the Vermont Hard Cider Company. This transaction transforms our international cider business and accelerates our growth prospects. We intend to invest in the company to capitalise on the growth opportunities presented by this business.” Bret Williams, President and CEO of VTHCC, commented: “We are delighted to join the C&C Group and to retain the values which define our success. We believe that C&C is the natural partner for our business. We share heritage, values and culture and are both strong believers in the future growth of cider. Our decision to continue to lead the business and become shareholders in C&C, as part of this transaction, reflects that belief.”

VTHCC is a premium, craft cider company based in Vermont, USA. In 1991, the VTHCC team began selling hard cider in the United States from a small craft production facility in Vermont. Since then, its main brand Woodchuck has grown into the top selling hard cider brand in the US. That growth reflects the pioneering spirit of the VTHCC team, their product innovation and their commitment to their consumer base. The Business currently employs 125 people, who will remain with the business. VTHCC is led by Bret Williams, President and CEO, and Dan Rowell, CFO, both of whom have entered into new service agreements with C&C to take effect on completion of the Transaction. Over the past three years, the Woodchuck brand has delivered cider volume and net revenue growth in excess of 23% and 29% respectively per annum. The Business being acquired is forecast to deliver volume and net revenue growth of 26% and 28% respectively in the 12 months to 31 December 2012. This translates to US$15 million of continuing EBITDA, representing a margin of approximately 27%.
The Business owns and operates:
−?trademarks for the Woodchuck cider brand and the Wyder’s cider brand;
−?a 400,000 hectolitre cidery and warehouse facilities in Vermont, USA, with an option on a new freehold site to expand the cidery and add a visitor centre;
−?a US national sales force and distribution capability; and,
−?a 20% shareholding in start---up Chinese cider brand, Gold Hard Cider. At 31 December 2011, VTHCC had gross assets of US$21 million, net assets of US$18 million and profit before tax of $10 million.