Beam to buy Cooley Distillery for US$95m

Cooley, which was set up in 1987, owns and produces the Kilbeggan, Connemara, Tyrconnell and Greenore brands.  It currently sells approximately 250,000 9-liter 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.

The purchase price is approximately US$95m on a debt-free basis. Beam expects the acquisition to be earnings neutral in 2012 and increasingly accretive moving forward.

The company, which is headquartered in Deerfield, Illinois and had sales of US$2.7bn in 2010, said the acquisition will mark its entrance into one of the spirits industry’s fastest-growing categories.

“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,” said Matt Shattock, president and chief executive officer 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.  We look forward to being good stewards of these iconic Irish assets.  We are also eager to work with the Cooley team, led by the Teeling family, who have built Cooley with so much pride and passion, to capitalize on the opportunities that lie ahead.”

“Beam understands whiskey,” said John Teeling, chairman and founder of Cooley Distillery. “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.”

The transaction is structured as a tender offer in which Beam will offer Cooley’s stockholders US$8.25 in cash for each outstanding share of Cooley stock.  The transaction is conditioned upon holders of at least 80pc of Cooley’s outstanding stock accepting the offer and other customary closing conditions.  Holders of over 75pc of Cooley’s outstanding stock have agreed with Beam to tender their shares in the offer.  The parties expect to complete the transaction in the first quarter of 2012.