US: Beam Inc offloads budget brands to Luxco for US$65m

By James Wilmore | 21 January 2013

Beam will focus on its more profitable brands following the sale

Beam Inc has agreed to sell a group of its “economy” spirit brands to Luxco for around US$65m.

The brands included in the deal are: Wolfschmidt vodka, Calvert (Lord Calvert Canadian, Calvert Extra, and gin), Bellows (blended whiskey, Bourbon, gin, rum, Scotch and vodka), Dark Eyes vodka, Canada House Canadian, and Tempo Triple Sec. The deal is expected to complete by the end of this month, Beam said.

Matt Shattock, Beam's president & CEO said: “Following the premium brand acquisitions we’ve made in the past two years, this move reduces portfolio complexity in economy vodka and Canadian whisky, and reinforces Beam’s focus on developing our Power Brands and Rising Stars, which are our most profitable growth engines.”

The brands, solely distributed in North America, generated sales of around $30m in 2012 and sold around 1.8m cases, Beam said.

Donn Lux, chairman & CEO of Missouri-headquartered Luxco, said: “Beam has done a great job in establishing them (the brands) across many markets and categories. We look forward to expanding them further and bolstering our entire portfolio with our distributors.”

Beam will continue to produce and bottle the brands until at least January 2014, the company said.

Expert analysis

Beam Inc. (BEAM) - Financial and Strategic SWOT Analysis Review

Beam Inc. (Beam), formerly known as Fortune Brands, Inc, is a premium spirits company. The company offers branded distilled spirits products. The product portfolio of the company consists of bourbon whiskey, Scotch whisky, Canadian whisky, tequila, cognac, rum, cordials, and ready-to-drink pre-mixed cocktails. The renowned brands offered by the company include Jim Beam Bourbon, Canadian Club Whisky, Maker’s Mark Bourbon, Sauza Tequila, Courvoisier Cognac, Teacher’s Scotch, Laphroaig Scotch, Knob Creek Bourbon, Cruzan Rum, Basil Hayden’s Bourbon, Kilbeggan Irish Whiskey, Hornitos Tequila, Skinnygirl Cocktails, EFFEN Vodka, Pucker Vodka and Sourz Liqueurs among others. The company’s major markets includes North America, Australia and Europe, and also maintains presence in the markets of India, Brazil, Russia, Central Europe, Asia, and other geographies. The company is headquartered in Illinois, the US. The company is expanding its operations as evident from its recent acquisition related agreement with White Rock Distilleries to acquire the fast-growing Pinnacle Vodka and Calico Jack rum brands and other related assets for $605m in cash.

Sectors: Mergers & acquisitions, Spirits

Companies: Beam Inc

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