Synergy-Driven Bolt-On Adds Fast-Growing Vodka Power Brand to Beam Portfolio • Addition of Calico Jack Rum Enhances Beam’s Offerings in Attractive Rum Category
Beam Inc. (NYSE: BEAM), a leading global premium spirits company, today announced that it has completed the acquisition of the fast-growing Pinnacle Vodka and Calico Jack rum brands from privately-held White Rock Distilleries. The purchase price was $605 million in cash, financed principally by the company’s recent bond issuance at attractive rates.
Pinnacle Vodka, the fourth largest imported vodka brand in the United States, will significantly enhance Beam’s presence in the large and growing vodka category. Pinnacle was the world’s fastest growing major premium spirits brand in 2011, according to Impact, which named both Pinnacle and Calico Jack to its list of 2011 Hot Brands. With a track record of very strong double-digit growth for its flavored and unflavored variants, sales of Pinnacle are expected to surpass three million cases in 2012.
“Vodka is by far the largest spirits category in the U.S., and Pinnacle is a strongly differentiated premium brand that sits at the heart of the category’s current and future growth,” said Matt Shattock, president and chief executive officer of Beam. “We look forward to leveraging our scale and skills in brand building, distribution management and supply chain to take Pinnacle to the next level. We also see the opportunity to create value through this bolt-on acquisition’s hard cost synergies that we’re confident will exceed 20% of the brands’ net sales. We anticipate a smooth integration of these brands, and we’re ready to hit the ground running.”
As previously announced, the company expects the acquisition to be approximately earnings neutral in 2012, accretive by 5-10 cents per diluted share in 2013, and increasingly accretive in 2014 and beyond.
Pinnacle Vodka joins the ranks of Beam’s Power Brands, which include Jim Beam and Maker’s Mark Bourbon, Sauza Tequila, Courvoisier Cognac, Canadian Club Whisky and Teacher’s Scotch.
About Beam Inc.
As one of the world’s leading premium spirits companies, Beam is Crafting the Spirits that Stir the World. Consumers from all corners of the globe call for the company’s brands, including Jim Beam Bourbon, Maker's Mark Bourbon, Sauza Tequila, Pinnacle Vodka, Canadian Club Whisky, Courvoisier Cognac, Teacher's Scotch Whisky, Cruzan Rum, Hornitos Tequila, Knob Creek Bourbon, Laphroaig Scotch Whisky, Kilbeggan Irish Whiskey, EFFEN Vodka, Pucker Flavored Vodka, Larios Gin, Whisky DYC, DeKuyper Cordials, and Skinnygirl Cocktails. Beam is focused on delivering superior performance with its unique combination of scale with agility and a strategy of Creating Famous Brands, Building Winning Markets and Fueling Our Growth. Beam and its 3,200 passionate associates worldwide generated 2011 sales of $2.8 billion, volume of 34 million 9-liter cases and some of the industry’s fastest growing innovations.
Headquartered in Deerfield, Illinois, Beam is traded on the New York Stock Exchange under the ticker symbol BEAM and is included in the S&P 500 Index and the MSCI World Index. For more information on Beam, its brands, and its commitment to social responsibility, please visit www.beamglobal.com and www.drinksmart.com.
This press release contains forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995, including statements as to the expected earnings impact of the transaction and the expected benefits of the transaction. Readers are cautioned that these forward-looking statements speak only as of the date hereof, and the company does not assume any obligation to update, amend or clarify them to reflect events, new information or circumstances occurring after the date of this release. Actual results may differ materially from those projected as a result of certain risks and uncertainties, including but not limited to: general economic conditions and credit market instability; customer defaults and related bad debt expense; competitive market pressures (including pricing pressures); changes in customer preferences and trends; risks pertaining to strategic acquisitions and joint ventures, particularly financial and integration risks; any possible downgrades of the company's credit ratings; commodity and energy price volatility; risks associated with doing business outside the United States, including currency exchange rate risks; inability to attract and retain qualified personnel; the impact of excise tax increases and customs duties on distilled spirits; the status of the U.S. rum excise tax cover-over program; dependence on performance of distributors and other marketing arrangements; costs of certain employee and retiree benefits and returns on pension assets; tax law changes and/or interpretation of existing tax laws; potential liabilities, costs and uncertainties of litigation; ability to secure and maintain rights to trademarks and trade names; impairment in the carrying value of goodwill or other acquired intangible assets; disruptions at production facilities; risks related to the Home & Security spin-off; and other risks and uncertainties detailed from time to time in the Company's Securities and Exchange Commission filings.