Campari announces further Acquisitions in strategic emerging markets
Milan, December 19, 2008 - Campari reached an agreement to purchase approximately 99% of the share capital of Ukraine based CJSC "Odessa Plant of Sparkling Wines". The business includes a plant and a portfolio of sparkling wine brands led by Odessa.
The purchase price of approximately 99% of the share capital is US$ 18.0 million (or € 12.6 million at current exchange rate). The remaining 1% of the share capital is owned by several individuals unrelated to the sellers. The consideration corresponds to a multiple of 7 times the expected EBITDA in 2009. The transaction is anticipated to close in early 2009 and the consideration will be paid for in cash.
With a total volume of 11 million bottles mainly sold in Ukraine, the portfolio is composed of strong brands in the local sparkling wine market, positioned across all price segments. The brands, which benefit from an excellent nationwide recognition, include Odessa, Golden Duke and L’Odessika.
Odessa is an important step towards the further strengthening of Campari’s position in key Eastern European markets. It is an attractive market opportunity, as Ukraine is the second largest sparkling wine market in Eastern Europe after Russia and is growing rapidly.
This deal follows other key corporate development initiatives recently completed in strategic emerging markets.
On November 28, 2008 Campari finalized the acquisition of 70% of Argentinian company Sabia S.A. The price of 70% of the share capital is US$ 4.2 million (or € 3.3 million at the exchange rate on the date of the deal), plus US$ 3.4 million (or € 2.7 million at the exchange rate on the date of the deal) of financial debt. The consideration corresponds to a multiple of 8 times the expected EBITDA in 2009. The business includes a production facility as well as a distribution platform. Established in 2006 by former executives of Allied Domecq, Sabia S.A. manages a portfolio of strong international and local brands and is one of the leading distributors of spirits and wines in Argentina. This deal is a strategic opportunity for Campari to expand its portfolio in the promising Argentinian market.
Moreover, as highlighted on November 11, 2008, Campari announced the acquisition of 100% share capital of the Mexican company Destiladora San Nicolas, S.A. de C.V. for US$ 17.5 million (or € 13.7 million at the exchange rate on the date of the deal), plus US$ 10 million (or € 7.8 million at current exchange rate) of financial debt. An earn-out based on the incremental sales volume of the brands acquired is also foreseen. The total consideration corresponds to a multiple of approximately 10 times the expected EBITDA in 2009, post synergies. This deal offers >significant potential for further growth in Mexico, a growing market for premium spirits, through a well established production and distribution platform.
Lastly, as illustrated on November 11, 2008, Campari announced the acquisition of 26% stake in Focus Brands Trading India Ltd., a newly-established joint-venture controlled by the Indian corporation Jubilant Group. The objective of this deal is to become a player in the spirits and wines business in India, an attractive market opportunity for international premium brands.