UK: JBB sells Scotch business to management team
Fortune Brands, today announced that its Jim Beam Brands Worldwide unit has sold its UK-based Scotch whisky business, to a management buy-out team.
The sale of the business, consisting of the Invergordon private-label and bulk Scotch operations and several regional brands in the UK is an attempt to sharpen the company's focus on high-return premium and super-premium spirits and wine brands, the company said.
The purchasers are the Scotch business's European management, backed by West LB, one of Germany's largest banks, and Rotch Property Group, a UK-based private company.
The selling price was approximately US$290m in cash.
JBB said the sale has no effect on the US or international distribution of the Jim Beam Brands portfolio of brands that includes Jim Beam bourbon, Knob Creek small batch bourbon, DeKuyper cordials, Vox vodka and Geyser Peak wines.
Jim Beam Brands will retain global ownership of After Shock, the liqueur brand marketed in the UK, and will also hold a perpetual license in the US to The Dalmore.
"This sale is another very positive strategic development for our Jim Beam Brands spirits and wine business," said Fortune Brands chairman & CEO Norm Wesley.
"On the heels of our creative distribution partnership with Absolut vodka, this move will enable Jim Beam Brands to intensify its strategic focus on the premium and super-premium spirits and wine market, the fastest-growing segment in the industry.
"The UK Scotch business, while successful, offered lower returns and lower
growth than our core spirits and wine business, and simply didn't fit with our
"This transaction will also further enhance Fortune Brands' financial flexibility to drive shareholder value higher. We'll evaluate our highest return opportunities for the use of the proceeds, including strategic acquisitions and attractive share repurchases," Wesley added.
The private-label, bulk and branded products included in the agreement generated year 2000 sales of approximately US$235m including excise taxes and operating company contribution of approximately US$38m. Among the regional brands included in the sale are Whyte & Mackay Scotch and Vladivar vodka.
Fortune Brands expects an after-tax gain on the sale of approximately US$20m will more than offset operational dilution of the transaction in the fourth quarter of 2001. The company expects the sale to be modestly dilutive to earnings in 2002.
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