Diageo has entered into a definitive agreement to acquire Casamigos, the fastest growing super-premium tequila brand in the US, co-founded by Hollywood actor George Clooney.
UK-Based Diageo says this “exciting opportunity” will strengthen its participation in the fast growing tequila category, as well as expand the brand internationally.
The transaction values Casamigos at up to US$1 billion, with initial consideration set at US$700 million and a further potential US$300 million based on a performance linked earn-out over 10 years, reflecting the brand’s exceptional growth trajectory and upside potential.
Casamigos was created in 2013 by founders Rande Gerber, George Clooney and Mike Meldman.
The essence of the brand, “made by friends for friends”, is reflected in the name, Casamigos or ‘house of friends’. Since inception Casamigos has received numerous awards and accolades from tequila experts, tastemakers and influencers across the US.
Casamigos has an authentic brand identity with a smooth and accessible taste profile. The brand’s quality and uniqueness has delivered impressive growth, reaching 120k cases in 2016, primarily in the US, and a CAGR of 54% in the last two years. The brand is on track to reach over 170k cases by the end of 2017.
To date, the founders have built a brand that has thrived under their organic approach in reaching and expanding their “house of friends”, and they will continue to promote the brand and provide their leadership and vision.
“We are delighted that the founders will have continued involvement and active participation in the future success of Casamigos,” says a Diageo statement.
“This, combined with the strengths of Diageo, will ensure the continued momentum of the brand in the US as well as realizing the growth opportunity from international expansion.”
The transaction is expected to close in the second half of this year, subject to regulatory clearances.
According to Diageo, the acquisition will be funded through existing cash resources and debt.
Ivan Menezes, Chief Executive of Diageo, said “We are delighted to announce this transaction to extend our participation in the tequila category. It supports our strategy to focus on the high growth super-premium and above segments of the category. With the global strength of Diageo we expect to expand the reach of Casamigos to markets beyond the US to capitalize on the significant international potential of the brand. We look forward to building on the remarkable success of Casamigos to date.”
Deirdre Mahlan, President Diageo North America, added: “I am excited by the opportunity to bring Casamigos into the Diageo portfolio which allows us to further penetrate this exciting and high growth category. We believe Casamigos will play a complementary role alongside Tequila Don Julio. We look forward to partnering with Rande, George and Mike to realize the full potential of the brand.”
“We are extremely excited to team up with one of the largest, most respected spirits companies in the world,” said Casamigos Tequila Co-founder, Rande Gerber. “What started from a friendship and an idea to create the best tasting, smoothest tequila as our own house tequila to drink and share with friends, has quickly turned into the fastest growing super-premium tequila.”
Source: Food Ingredients First
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