Sep 2012 Financial News

Campari Buys Rum Maker Lascelles DeMercado in Third-Largest Deal

Sep 03, 2012

Sept. 3 (Bloomberg) -- Davide Campari-Milano SpA said it will purchase Lascelles deMercado & Co., the Jamaican maker of Appleton rum, in a deal worth $414.8 million to hasten the Italian distiller’s push into overseas markets.

Campari agreed to buy a controlling 81.4 percent stake and will make a formal tender offer for all the shares, the Milan- based company said today in a statement.

The acquisition is the third-largest by Campari, and marks the company’s entry into the rum category. The distiller said the deal will give it a market-leading position in Jamaica and provide growth potential in the U.S., Canada and Mexico.
Lascelles deMercado’s brands include Wray & Nephew and Coruba.

“The acquisition of a family of premium rum brands will allow Campari to leverage its growing portfolio of premium vodka, bourbon and tequila, while allowing it to boost sales and efficiencies of its network,” Mauro Baragiola, an analyst at Citigroup Inc. in Milan, wrote today in a note.

Campari rose as much as 4.3 percent in Milan trading and was up 3.9 percent at 5.68 euros as of 9:13 a.m. local time.

The purchase of the stake and the tender offer are expected to take place in the fourth quarter, Campari said. The deal does not include Lascelles deMercado’s other assets in insurance, transportation and other securities, which are being divested.

The business being acquired had total so-called pro-forma sales of $265.4 million in the year ended Sept. 30. Campari said it will fund the purchase through credit facilities underwritten by Bank of America, Banca Intesa and Deutsche Bank AG.

Bank of America Merrill Lynch acted as financial advisers to Campari, while Morrison & Foerster acted as legal adviser.


Source:
By Sarah Shannon
Bloomberg
Monday September 3, 2012
2012-09-03 07:38:04.212 GMT

To contact the reporters on this story:
Sarah Shannon in London at +44-20-7073-3262 or sshannon4@bloomberg.net