Beam Inc is expected to complete the Pinnacle deal this quarter

Beam Inc is expected to complete the Pinnacle deal this quarter

The US$605m acquisition of Pinnacle Vodka will give Beam Inc “two barrels of a gun that fires very well”, according to the company's CEO.

Speaking on Beam's Q1 conference call, yesterday (3 May), Matt Shattock said Pinnacle's roots in the unflavoured vodka sector and position as a key driver of the growing flavoured market is a strong strategic fit for his company.

“What's great about this brand is that we've got scale in both the unflavoured and flavoured parts of the category,” he said in the call shortly after Beam released its first-quarter results

"We've got a brand that's really operating at the sweet spot of not just the current but the future drivers of the vodka category's growth trajectory.”

Beam is expected to complete its purchase of the fourth-largest imported vodka brand in the US in the second quarter.

Shattock said he expected Pinnacle to boost Beam growth in its first full year, adding US$0.05 to $0.10 per share in 2013 with higher growth beyond. 

He said volumes for the brand should exceed 3m cases next year.

“Our extensive consumer research indicates excellent future prospects for the vodka category and the dynamics supporting Pinnacle's growth,” Shattock said.

“But [Pinnacle is] also a bolt-on rooted in higher cost synergies that we're confident will exceed 20% of the brand's net sales.”

For a transcript of the conference call, click here.