Campari makes business cocktail with whisky acquisition
Iconic Italian brand buys Canada's Forty Creek, posts losses12 March, 19:23
The cash purchase, for a total of $185.6 million Canadian, or 120.5 million euros, gives Milan-based Campari total ownership of the Canadian firm known as FCD and its portfolio of premium alcohol products.
"The addition of FCD will enable us to further build our critical mass in key North American markets, providing us with a strong market position in Canada and positioning us for further growth in our core U.S. market," Campari Chief Executive Bob Kunze-Concewitz said in a statement.
FCD founder John Hall established the Ontario-based company in 1992, beginning with premium whiskey and expanding to include vodka, brandy, rum and liquers.
"Introducing customers around the world to my whisky is a dream come true," said Hall.
"Today's deal represents a milestone for myself and the entire Forth Creek team". FCD labels include Barrel Select, Copper Pot Reserve, abd Forty Creek Cream Whisky.
The firm's whiskies have won Canadian Whisky of the Year championships three times, and earned five gold medals as Best Tasting Whiskies at the Beverage Testing Institute in Chicago (2014).
Liquor giant Campari, best-known for its signature red aperitif, said it values the Canadian company at 14.5 times its forecast 2014 core earnings, or EBITDA.
The deal is to close on June 2 and will give the Italian firm FCD's entire portfolio including distilleries and a hospitality centre in Grimsby, Ontario near Niagara Falls.
Campari's Jean Jacques Dubau, managing director for North America, said the deal will help the Italian firm expand its brand portfolio "as well as position us for further growth in our core US market".
"Through this acquisition we enter the very large and appealing Canadian whisky category, thus premiumizing our brand portfolio, driving a richer product mix and further leveraging the revival of brown spirits," he added in a statement. The announced deal came as Campari, a style leader in Italy that also produces such brands as Aperol and Cinzano, revealed that its net profit fell by 4.4% in 2013 to just under 150 million euros.
Shares in Campari fell by 5.83% on the Milan stock exchange Wednesday afternoon after the deal and the annual earnings results were both announced. In recent years, Campari has had a strategy to expand further into the international liquor market where it already owns more than 45 popular brands, including such names as Skyy vodka and Glen Grant whisky.
Campari was established in 1860 by Gaspare Campari, who sold the aperitif that still bears his name at a cafe in Milan. The Campari label grew in popularity over the years, and by the 1960s was expanding internationally, with its brands now distributed in more than 190 countries thanks, in part, to its associations with Italian style and culture.
Adding to its allure is the sleek Campari calendar that draws the eyes of style-watchers every year, by featuring such popular and eye-catching celebrities as Eva Mendes, Salma Hayek, Jessica Alba, Uma Thurman and Benicio del Torro.