Diageo, an alcohol company that owns a list of brands including Guinness, Johnnie Walker and Captain Morgan, has agreed to acquire Casamigos, a premium tequila brand. Casamigos was created in 2013 by George Clooney, Michael Meldman and Rande Gerber. The transaction values Casamigos at up to $1 billion in a deal comprising $700 million up front and another $300 million based on a performance-linked earnout over 10 years.
Through the deal, Diageo has secured a complementary brand to Don Julio, its other tequila label, with plans to expand the footprint for Casamigos beyond the US. Casamigos has delivered on its growth promises, reaching a compound annual growth rate of 54% in the last two years primarily on sales within the US. Casamigos is on track to sell more than 170,000 cases of tequila by the end of 2017 for a YoY uptick of 17%.
Although corporate acquirers like Diageo have made more and more beverage deals with each passing year since 2013, reaching a new high of 110 last year, this year has booked just 35 completed acquisitions in the space, per the PitchBook Platform. Last year’s total includes ABInBev’s industry-realigning takeover of SABMiller. Late last month, Campari put its Irish Mist whiskey and Carolans Irish cream brands up for sale.
Article by PitchBook
