Campari announced that it has entered into an agreement to acquire an initial 70% stake, and in 2031 the remaining 30% stake in Wilderness Trail Distillery, LLC (‘Target’). This is what we read in the press release issued this morning by the company.
“Wilderness Trail Distillery, located in Danville, Kentucky, USA, was founded in 2012 as a premium artisan distillery with the goal of producing the highest quality bourbon and rye whiskey. Leveraging an advanced and versatile operational infrastructure, the founders launched two premium proprietary Wilderness Trail expressions in 2018:
Bourbon Wilderness Trail and Rye Whiskey Wilderness Trail. The product range was further elevated with
the introduction of a high-end line of silver label bourbon aged six and eight years for a more intense and mature taste. The average selling price ranges from USD55 for Wilderness Trail Bourbon, for the 75cl bottle, to USD75 and above for six and eight year old bourbon expressions ”.
Campari continues, specifying in the note that “the founders and current shareholders, Shane Baker and Pat Heist, are fermentation experts with over 20 years of experience.
in the production of whiskey, which have always been recognized as innovators in design, research and development and in fermentation and distillation activities. The distillery’s unique infusion mashing process and sweet mash technique allow for highly versatile production thanks to the variety of cereals and yeast strains used, and create bourbon and rye whiskey with a unique flavor. “
Bob Kunze-Concewitz, Chief Executive Officer of Campari Group commented on the agreement:
“We are very excited to acquire a majority stake in the prestigious Wilderness Trail Distillery. By integrating the super-premium and fast-growing Wilderness Trail brand, we are expanding and making our bourbon portfolio even more premium, as it prepares to become Campari Group’s second largest development axis after aperitifs. Furthermore, we accelerate our premiumisation journey by further strengthening the RARE portfolio, our division aimed at accelerating
growth and to exploit the potential of a select range of super and ultra-premium brands and expressions in our main markets. In addition, we have the opportunity to significantly increase our production capacity and aging warehouse to meet the future growth of our premium bourbons, including the high-end range.
potential Whiskey Barons, currently limited by capacity constraints. We are really excited to partner with a
such a qualified team of fermentation and distillation experts, which will allow us to accelerate and expand
significantly the innovation platform for our bourbon portfolio ”.
So Shane Baker and Pat Heist, Co-Founders of Wilderness Trail Distillery:
“We are thrilled with our collaboration with Campari Group. Premium bourbon and rye whiskey and state-of-the-art manufacturing facilities coupled with a global distribution network, world-class marketing and expertise across multiple spirit categories lay the ideal foundation for Wilderness Trail’s continued success, and ensure that the brand to be appreciated around the world for years to come. This is a winning combination for both parties and we are very proud of this partnership and what we can achieve together with our common vision ”.
Campari announced that, “For the fiscal year ended December 31, 2021, the acquired company generated total net sales of USD40.8 million. This includes the Wilderness Trail brand’s net sales of bourbon and rye whiskey of USD7.2 million, while the remainder was generated by the sale of liquid bourbon in bulk, storage service and visitor center revenues. For the same period, EBITDA of USD22.7 million was generated under local accounting principles.For the fiscal year ending December 31, 2022, the acquired company is expected to achieve total sales of approximately USD57 million, up by approximately 39% compared to the previous year, with an increasing weight of the high-margin business generated by the sale of the bourbon and rye whiskey brand Wilderness Trail compared to the bulk liquid, and an EBITDA of approximately USD37 million according to local accounting principles, in an increase of approximately 64% compared to the previous year “.
“The consideration amounts to USD420 million (or € 420 million) for the initial 70% of the capital. The corresponding enterprise value for 100% of the capital is equal to USD600 million (or € 600 million), in the absence of cash or financial debt, equivalent to a multiple of approximately 16 times the EBITDA expected for 2022. Campari Group will acquire the remaining 30% of the capital through a call / put option exercisable in 2031 at an enterprise value determined by applying the above multiple to the highest EBITDA between that of 2030 and the average of 2028-2030. As of September 30, 2022, the book value of the inventory was USD 24.0 million, consisting exclusively of bourbon and rye whiskey Wilderness Trail (the bulk liquid is sold as new and, therefore, no inventory is established for this business line). The purchase price to be paid at closing will be financed using a combination of available liquidity and bank loans
a termine”.
“Following the acquisition – underlines Campari – the multiple of the net financial debt with respect to the adjusted EBITDA on a pro forma rolling basis of the Campari Group is destined to increase from the current 1.5 times to 2.3 times at the closing of the transaction. The transaction, subject to customary closing conditions, is expected to close by the end of 2022. Until finalization, each company will continue to operate independently ”.
It is noted in the release that “William Blair & Company acted as the sole financial adviser to the sellers and Benesch, Friedlander, Coplan and Aronoff LLP acted as their legal counsel. McDermott Will & Emery LLP acted as legal and tax advisor to Campari Group ”.