Davide Campari-Milano SpA, the Italian distiller, agreed to buy French cognac-maker Grand Marnier Group in a deal that values the family-owned company at €684 million ($760 million), adding more high-end spirits to its portfolio.
Grand Marnier investors will get €8,050 in cash per share, plus a possible payment related to the planned sale of real-estate property, Campari said in a statement. Campari shares rose as much as 1.8 per cent in Milan.
"Grand Marnier is a French icon, with a rich 150-year history for which we have profound respect," Campari chief executive officer Robert Kunze-Concewitz said.
The acquisition is the first for Campari since 2014, and the biggest since Kunze-Concewitz took the helm in 2007. The maker of Wild Turkey bourbon and Skyy vodka also entered an agreement to be the worldwide exclusive distributor of Grand Marnier’s spirits, effective in July, confirming a Bloomberg report. Grand Marnier produces cognac, Armagnac and wines, and gets more than half of its €140 million in sales from the US, where young drinkers are ordering more of the classic cocktails once enjoyed by their grandparents.
Immediate Profit
Campari said that the purchase will add to profit immediately on a pro-forma, full-year basis. The Italian company said that the price implies an enterprise value that is 13.7 times Grand Marnier’s adjusted 2015 operating profit.
The Italian company agreed to buy stakes from the Marnier-Lapostolle family shareholders, and if investors don’t tender 50.01 per cent of the company’s stock, the main stakeholders will sell shares and relinquish special voting rights to ensure that Campari gets control. Trading in Paris-based Grand Marnier’s shares remained halted after being suspended ahead of the announcement.
Grand Marnier was founded in 1827 by Jean-Baptiste Lapostolle, who started a distillery producing fruit liquors. Its namesake, orange-flavoured cognac is often used to make Cosmopolitan cocktails, favoured by Sex and the City character Carrie Bradshaw and singer Madonna.
Campari said that it may sell a villa surrounded by botanical gardens that Grand Marnier owns in Saint Jean Cap Ferrat, an exclusive peninsular town east of Nice, on the Mediterranean coast. The house, known as Villa les Cedres, was built in the 1800s and acquired by King Leopold II of Belgium in 1904, according to a regional government website. Louis-Alexandre Marnier-Lapostolle bought the property in the 1920s.
Bank of America Merrill Lynch and Philippe Villin advised Campari on the transaction, with CACIB as joint financial adviser. Brandford Griffith & Associes and Pedersoli & Associati acted as legal advisers.
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