BF.B Brown Forman Corp

Spun off of Fortune Brands, liquor producer Beam Inc. (BEAM) will buy renowned Irish whiskey maker Cooley Distillery. Per the deal, Beam will gain control of this leading spirits company for about $95 million on a debt-free basis.

Under the transaction, Beam will offer Cooley shareholders $8.25 in cash in exchange of every Cooley share. Depending on the acceptance of a minimum of 80% Cooley shareholders and other customary conditions, the companies expect to close the transaction in the first quarter of 2012.

Beam’s deal with Cooley, one of the only three sources for Irish whiskey and the only independent player, provides a solid gateway for Beam’s entry into one of the spirits industry's highest growth categories. The Irish whiskey category grew 11.5% in 2010 to 4.86 million cases, according to Impact Databank.

Product portfolio of the Irish distillery includes Kilbeggan Irish whiskey, Tyrconnell Single Malt, Connemara Peated Single Malt and Greenore Single Grain Irish whiskey. Cooley’s sales for 2010 reached nearly 250,000 9-liter cases per year including its brands, private label products and bulk sales to third-party customers.

Beam’s brands include Jim Beam Bourbon, Maker's Mark Bourbon, Sauza Tequila, Canadian Club Whiskey, Courvoisier Cognac, Teacher's Scotch Whisky, Laphroaig Scotch Whisky, Cruzan Rum, Hornitos Tequila, Knob Creek Bourbon, EFFEN Vodka, Pucker Flavored Vodka, Larios Gin, Whisky DYC, DeKuyper Cordials, and Skinnygirl Cocktails.

The company expects earnings from the addition of Cooley’s brands to increasingly reflect in Beam’s financial statements after 2012. The acquisition will have no impact on fiscal 2012 earnings.

Deerfield, Illinois-based spirits giant Beam engages in producing and selling branded distilled spirits products worldwide. The company’s portfolio includes 10 of the world’s top 100 premium spirits brands and some of the industry’s fastest growing innovations.

Worldwide, the company generated 2010 sales of about $2.7 billion on volume of 33 million 9-liter cases. Beam was formerly part of Fortune Brands, which separated into two publicly traded companies, Beam Inc. and Fortune Brands Home & Security Inc. (FBHS).

Currently, Beam has a Zacks #2 Rank, implying a short-term Buy rating on the stock. However, the company retains a long-term Neutral recommendation. The company competes with well-established players, such as Diageo plc (DEO) and Brown-Forman Corporation (BF.B).

 
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