US: Brown-Forman targets US$3bn spirits acquisitions - analyst
Brown-Forman has whiskey and vodka in its sights
Brown-Forman is ready to dip into a US$3bn warchest to fund a whiskey or vodka acquisition, an analyst has said.
The Jack Daniels owner wants to add to its Bourbon brands with a Scotch whisky or Irish whiskey addition, Nomura said in a client note issued today (1 October). It also seeks to follow a recent buyout of Finland-based Maximus vodka with more acquisitions in the category, the note said.
Brown-Forman already owns the Finlandia vodka brand, which it bought in 2000.
The company will fund any deal with a 2.5x net debt/ebitda leverage that should free up $3bn, the note said, adding that smaller specific brand or country deals would be expected.
Nomura based the note on having "recently spent some time" with Brown-Forman, noting that it the company "continues to outperform" the international spirits market.
Nomura said new innovations in Brown-Forman's Jack Daniels has helped push the brand's sales growth in Q1 to 15% compared to 10% for the company's overall sales.
“Having been the last of the major American whiskey brands to launch into flavours, Jack Daniel's has overtaken all the competitors with Tennessee Honey, achieving nearly 0.5m cases in its first year,” the note said.
Tennessee Honey was released in April last year and has since been launched in the UK and Germany.
Earlier this month, Bacardi announced the launch of Dewar's Highlander Honey in the US. The move has ruffled feathers in Scotland, where the heritage and provenance of Scotch whisky is almost an obses...
- What Brexit means for drinks industry? - Analysis
- The post-Brexit winners and losers - Analysis
- What does Brexit mean for AB InBev's SAB deal?
- Is there a future for the global beer brand?
- Can fruit cider survive UK slowdown? - Focus
- The UK Referendum - just-drinks Live Blog
- Aldi dealt alcohol sales blow in Australia
- Ex-William Grant CEO Stella David re-joins Bacardi
- UK spirits producers braced for Brexit impact
- Maxxium eyes US$1.4bn opportunity in UK spirits
- Adultifying Soft Drinks; Capitalizing on rising adult demand for non-alcoholic beverages
- Global Scotch whisky insights - market forecasts, product innovation and consumer trends
- Spirits and Wine: Corporate Overview
- Global non-Scotch whiskies insights - market forecasts, product innovation and consumer trends
- Global RTD insights - market forecasts, product innovation and consumer trends