US: Brown-Forman targets US$3bn spirits acquisitions - analyst
By Andy Morton | 1 October 2012
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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.
Expert analysis
Brown-Forman Corporation: Consumer Packaged Goods Company Profile, SWOT & Financial Report
"Brown-Forman Corporation: Consumer Packaged Goods Company Profile, SWOT & Financial Report" contains in depth information and data about the company and its operations. The profile contains a company overview, business description, competitive benchmarking, SWOT analysis, key facts, information on products and services, details of locations and subsidiaries, plus information on key news events affecting the company.
Sectors: Mergers & acquisitions, Spirits
Companies: Brown-Forman, Jack Daniels, Finlandia
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US: Brown-Forman targets US$3bn spirits acquisitions - analyst
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