Pernod Ricard toasts to US$223m Castle Brands acquistion
29 Aug 2019 --- The world’s second-largest distiller, Pernod Ricard, along with alcohol manufacturer and marketer Castle Brands Inc. have announced that they have entered into a definitive agreement. In the deal, a subsidiary of Pernod Ricard will acquire all of the outstanding common stock of Castle Brands for approximately US$223 million, plus the assumption of debt, through a cash tender offer followed by a merger. Pernod Ricard’s acquisition of Castle Brands’ products will expand Pernod Ricard’s line-up of premium brands, which the company says aligns with their consumer-centric strategy.
“Through this acquisition, we welcome this great brand portfolio, in particular, Jefferson’s bourbon whiskey, to the Pernod Ricard family. Bourbon is a key category in the US, which is our single most important market,” says Alexandre Ricard, Chairman and CEO of Pernod Ricard
The result took months of planning and deliberation by Castle Brands Board of Directors, according to Richard J. Lampen, President and CEO of Castle Brands. “We are confident that this transaction, upon closing, will deliver immediate and substantial cash value to our shareholders,” he adds.
Terms of the agreement
Under the terms of the merger agreement, which has been unanimously approved by the Castle Brands Board of Directors, Castle Brands shareholders will receive US$1.27 in cash for each outstanding share of Castle Brands common stock they own. This represents a 92 percent premium to Castle Brands’ closing share price on August 27, 2019, and a 109 percent premium to the 30-day volume-weighted average share price through such date.
The merger agreement provides for a cash tender offer to acquire all outstanding shares of Castle Brands to be launched shortly. Once the tender offer is successfully completed, Pernod Ricard will acquire all shares not acquired in the tender offer through a second-step merger. This will involve the holders of the outstanding shares of Castle Brands common stock not tendered in the offer receiving the same per share price paid in the tender offer, in cash. The transaction is expected to close in the fourth quarter of this year.
Another toast to Pernod Ricard
2019 has been a strong year for the distiller giant. In June, Pernod Ricard USA’s New Brand Ventures division acquired a majority share of Rabbit Hole Whiskey, produced and based in Louisville, Kentucky. Pernod Ricard reported that the Bourbon category is currently undergoing a “renaissance,” as new consumers are discovering its quality and versatility in modern mixology.
Last year Pernod Ricard also reported that sales and profit growth accelerated, driven by strong demand in China and India, as well as robust sales in the US, which is its top market. Pernod Ricard trails British multinational alcoholic beverages company, Diageo, in revenue among global distillers.
By Missy Green
