Business
MGP Ingredients to Acquire Penelope Bourbon
Premium plus American Whiskey brand consistent with MGP’s premiumization strategy focused on gross margin accretive growth brands ATCHISON, Kan., May 08, 2023
About this update from Mgp Ingredients, Inc.
[{"type":"text","content":"Premium plus American Whiskey brand consistent with MGP’s premiumization strategy focused on gross margin accretive growth brands\nATCHISON, Kan., May 08, 2023 (GLOBE NEWSWIRE) -- MGP Ingredients, Inc. (Nasdaq: MGPI), a leading provider of distilled spirits, branded spirits, and food ingredient solutions, today announced that its Luxco, Inc. subsidiary has reached a definitive agreement to acquire 100% of the equity of Penelope Bourbon LLC (“Penelope Bourbon” or “Penelope”) and its related assets. Founded in 2018, Penelope Bourbon is a family and founder-owned and operated American Whiskey company with a diverse portfolio of high-quality whiskeys in the premium-plus price tiers. The acquisition includes all intellectual property and inventory of bottled product, as well as Penelope’s aging whiskey inventory on a debt-and-cash-free basis. The upfront consideration is $105.0 million in cash to be paid at closing, with further potential earn-out contingent consideration of up to a maximum cash payout of $110.8 million measured through December 31, 2025 if certain performance conditions are met, reflecting the brand’s current growth potential. The acquisition is expected to be financed using MGP’s existing revolving credit facility and cash on hand. Transaction Highlights Enhances presence in growing American Whiskey categoryExpands portfolio of premium-plus price point brandsLeverages Branded Spirits national distribution platform to extend Penelope’s reachCurrent MGP Distilling Solutions customerExpected to be immediately accretive to Branded Spirits segment gross margin and consolidated adjusted basic earnings per share after closeAnticipated total cost synergies of approximately $5 million by December 31, 2025Transaction is anticipated to close in June 2023 “We are excited to welcome Penelope as part of our expanding premium-plus brand portfolio,” said David Colo, president and CEO of MGP Ingredients. “This acquisition aligns well with our premiumization strategy and our focus on growing high potential, high margin brands. Penelope is an excellent addition to our Branded Spirits portfolio as we look to expand its availability throughout our national distribution platform. We are enthusiastic about this acquisition and its ability to further our participation in the growing American Whiskey category while delivering meaningful lo...