Staking a claim in the smoking-hot Canadian whisky market, Italian beverage giant Campari is poised to snap up what’s billed as the only independent whisky maker in Ontario.
Gruppo Campari on Wednesday announced a cash deal to buy full ownership of Forty Creek Distillery of Grimsby, Ont. for $185.6 million.
Milan-based Campari said Forty Creek, founded in 1992 by winemaker John Hall, will mark its first move into the “growing and attractive” Canadian whisky category with “high-end premium products.”
The deal, which includes all stocks and the company’s distillery, manufacturing plant and hospitality centre at Grimsby, is expected to close June 2.
Campari described Forty Creek as “the fastest growing player in the Canadian whisky category in Canada” and “well positioned in the key U.S. market to capitalize on the high potential offered by the Canadian whisky category.”
Forty Creek booked $34.2 million in total net sales in its fiscal year ending March 31, 2013, of which its whisky brand represented about 62 per cent, Campari said. In the year ending March 31, 2014, Forty Creek is expected to post net sales of $39.5 million, up 15.6 per cent.
Apart from its eponymous whisky brand, Forty Creek’s product portfolio includes Prince Igor vodka, Canada Gold whisky, Bolivar liqueur, Small Cask brandy, Alpenbitter No. 7 and Harry’s Hurricane spiced rum.
Campari today bills itself as the world’s sixth-largest player in premium spirits, operating 15 plants and four wineries producing brands including Wild Turkey and Irish Mist whiskys, Skyy vodka, Liebfraumilch wine, Appleton Estate rum and Campari, Cinzano and Aperol aperitifs.
Campari’s move follows a $16 billion play by Japan’s Suntory in January to buy U.S. whisky and bourbon giant Beam Inc., which would give it the Canadian Club and Alberta Premium whisky brands.
“Via the entry to the large and growing Canadian whisky segment, this acquisition further increases our exposure to the highly attractive brown spirits category whilst continuing to enhance our premium portfolio,” Campari CEO Bob Kunze-Concewitz said in a release Wednesday.
“Moreover, the addition of FCD will enable us to further build our critical mass in key North American markets, providing us with a strong market position in Canada and positioning us for further growth in our core U.S. market. At the same time, our international route to market will also enable the Forty Creek whisky brand to grow faster out of its core North American market.”
Also, he said, “through this acquisition we will also be able to internalize key activities in the Canadian market.”
Campari noted all of Forty Creek’s business structures and processes will remain in place and unchanged in Canada; Hall will remain both chairman of Forty Creek and whisky maker for the Grimsby distillery.
“I believe this opportunity will further support Forty Creek’s vision to produce unique, quality, handcrafted, Canadian-made spirits,” Hall said in Campari’s release. “Campari has the global ability to take Forty Creek to the next level.”
Furthermore, he said, “I am proud to note today’s announcement ensures even greater added economic value to both the Ontario and Canadian economy through Campari’s investment in the Grimsby distillery and the Forty Creek family of brands.” — AGCanada.com Network