Gruppo Campari Announces the Acquisition of a Controlling Interest of Cabo Wabo® Tequila
Award-winning ultra premium tequila and one of the fastest growing brands in the US spirits markets. Founded by rock star and tequila connoisseur Sammy Hagar. Deal valued US$ 80 million (€ 60 million) for 80% interest in Cabo Wabo Tequila. Strategic addition to Gruppo Campari portfolio of ultra premium brands in the US
Milan, 7 May 2007 - Gruppo Campari announced that it has reached an agreement with the entrepreneur and rock star Sammy Hagar to purchase an 80% interest in Cabo Wabo Tequila.
The total price paid for the acquisition is US$ 80 million (or € 60 million at current exchange rate), corresponding to 11.8 times the expected EBITDA in 2007. The transaction is anticipated to close in January 2008 and the consideration will be paid for in cash.
“Cabo Wabo is a strategic acquisition for Gruppo Campari as it significantly contributes to build our diverse portfolio of ultra premium brands in the US”, says Enzo Visone, CEO of Gruppo Campari. “We are proud to have concluded another important deal that not only enables us to further strengthen our position in the US ultra premium spirits market, but also to increase Gruppo Campari’s focus in tequila by owning a brand in a very important and growing category.”
Cabo Wabo is an award-winning ultra premium tequila, including Cabo Wabo Reposado, Cabo Wabo Añejo, Cabo Wabo Blanco, and new ultra luxury Cabo Uno, barrel-aged for three years.
With a volume of approximately 70,000 nine-liter cases, mainly sold in the US, Cabo Wabo is one of the fastest growing brands in the US spirits market.
Cabo Wabo enjoys a strong reputation for its quality, exceptional smoothness and taste, and heritage. Cabo Wabo’s strong credentials are reflected in the Double Gold Award for Reposado - one of many awards won - at the 2006 World Spirits Competition in San Francisco. Produced and bottled in the Tequila region, Mexico, Cabo Wabo is made from 100% Blue Weber Agave, and is crafted according to the traditional production methods combined with stringent quality standards that consistently produce the smoothest and finest tequila.
With an increase of c.10% in 2006, tequila is today one of the fastest growing categories in the US spirits market. Furthermore, in the US the category has outperfomed most other major spirits categories over the last years, mainly thanks to brand premiumization.
Founded in 1996 by Sammy Hagar, Cabo Wabo Tequila was firstly imported in the US in 1998 and quickly gained loyal following and success among fans and tequila lovers.
Sammy Hagar, inventor and major shareholder of Cabo Wabo, is a professional rocker and tequila connoisseur. After a successful solo-career, he became the lead singer, songwriter for Van Halen in the 80’s and early 90’s. Sammy Hagar’s love for hand-crafted tequilas led to the development of Cabo Wabo 100% blue agave tequilas.
Sammy Hagar has been the brand ambassador and the creative force behind the Cabo Wabo brand. His inventive energy and endorsement contributed significant value to the creation of Cabo Wabo.
“When I created Cabo Wabo, I never dreamed that it would be received so well by my fans and people who really love good tequila," said Sammy Hagar. "While I am proud of its success, it's time to let the world have a shot at the best tequila on the planet and Gruppo Campari can help take us there."
Following the deal closing, Sammy Hagar and his associate Marco Monroy will continue to own 20% of Cabo Wabo.
Gruppo Campari together with Sammy Hagar will join forces in expanding Cabo Wabo world class tequila line. Sammy Hagar will remain involved in supporting the business and will continue to be intimately involved in the brand's quality guide lines and in the marketing designed to expand brand awareness and sales in the US and in the rest of the world.
It should be also noted that Gruppo Campari will have the opportunity to buy the remaining 20% interest in Cabo Wabo in two tranches of 15% and 5% through call / put options to be exercised in 2012 and 2015 respectively.
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Please note that Gruppo Campari’s management will discuss the acquisition in greater detail during its conference call scheduled for 5:00 p.m. (CET) on Tuesday, 8 May 2007, where 2007 first quarter results will aso be analysed. To participate, please dial one of the following numbers:
- from Italy: 800 785 163 (toll free number)
- from abroad: 39 02 6968 2741
Access code: C132971
The presentation on the acquisition of Cabo Wabo® can be downloaded before the conference call from the Investor Relations homepage of Gruppo Campari's website.
A recording of the conference call will be available from 9:00 p.m. (CET) on Tuesday, 8 May 2007 until 9:00 p.m. (CET) on Tuesday, 15 May 2007. To hear it, please call +44 20 713 69233 (access code: 25772275 #).