• Beam Inc to buy Cooley for US$95m
  • Acquisition made on debt-free basis
  • Transaction completed by Q1 2012

Beam Inc is to buy Cooley Distillery, the only remaining independent whiskey distillery outside Pernod Ricard and Diageo's operations in Ireland, for close to US$95m.

The deal, which was announced today (16 December), will be on a debt-free basis and marks Beam's entry into the Irish whiskey category.

Cooley owns and produces the Kilbeggan, Connemara, Tyrconnell and Greenore brands.  It currently sells around 250,000 9-litre cases per year - divided among its brands, private label products and bulk sales to third-party customers. Cooley has production capacity to support "substantial future growth", Beam said.

Beam will offer Cooley's stockholders $8.25 in cash for each outstanding share of their stock in the Irish company, dependent on holders of at least 80% of Cooley's outstanding stock accepting the offer, and other customary closing conditions. Holders of over 75% of Cooley's outstanding stock have irrevocably agreed with Beam to tender their shares in the offer.

The US-base spirits firm noted that it expects the acquisition to be earnings neutral in 2012 and increasingly accretive moving forward.
 
"Cooley is one of only three sources for Irish whiskey, and the only independent player, so this transaction is a ... high-return opportunity to enter one of the industry's highest growth categories," said Beam's president and CEO, Matt Shattock.

"We see the opportunity to leverage our combination of scale with agility to further build consumer demand for Cooley's ... brands, and to expand distribution off a relatively small base in key export markets for Irish whiskey across North America and Europe."

John Teeling, Cooley's chairman and founder, added: "The renaissance in Irish whiskey, most evident in the US, is now spreading across the world. Through Beam, our brands ... will be introduced to a host of new consumers."

Last year, the Irish whiskey category grew by 11.5% year-on-year to 4.9m cases, according to Impact Databank.

The parties expect to complete the transaction in the first quarter of next year.