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 category
- Expands portfolio of premium-plus
price point brands
- Leverages Branded Spirits national
distribution platform to extend Penelope’s reach
- Current MGP Distilling Solutions
customer
- Expected to be immediately
accretive to Branded Spirits segment gross margin and consolidated
adjusted basic earnings per share after close
- Anticipated total cost synergies of
approximately $5 million by December 31, 2025
- Transaction 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 long-term growth.”
“MGP has been an incredible partner of ours
since we started our business in 2018. We are excited to take our
partnership to the next level with the goal of accelerating
Penelope’s growth for years to come,” said Michael Paladini, CEO
& Founder of Penelope. “Since our initial product launch in
2019, it has been amazing to watch consumers embrace our brand. We
look forward to expanding our partnership with MGP and building on
our legacy,” said Daniel Polise, COO & Founder of Penelope.
AdvisorsReed Smith LLP acted as
legal transaction advisor to MGP. TD Cowen served as exclusive
financial advisor and BakerHostetler acted as legal transaction
advisor to Penelope Bourbon.
About Penelope Bourbon
Founded in 2018, Penelope Bourbon has been one
of the country’s fastest-growing whiskey brands. Named after the
founder’s daughter, Penelope boasts a series of straight bourbon
whiskey expressions that are all uniquely blended from three
different mash bills. Remarkably smooth and flavorful, Penelope is
perfect whether sipping neat or mixing in a cocktail.
Penelope’s core expressions, Four Grain, Barrel
Strength, Architect and Toasted Series, have received over 30
combined awards and industry accolades. Most recently, the brand
won Double Gold and ‘Best of Class’ at the 2022 San Francisco World
Spirits Competition, and was awarded three Double Platinum Medals –
along with the title ‘Blender of the Year’- by the ASCOT Awards
(2022).
In addition to its cornerstone expressions,
Penelope continues to introduce new and innovative limited releases
within its Cooper Series, Private Select and Founders Reserve
lines.
Today, Penelope Bourbon is sold in over 30
states and 4 countries. Proving that with enough love and care, and
hard work, anything is possible. To learn more about Penelope,
please visit penelopebourbon.com
About MGP Ingredients, Inc.MGP
Ingredients, Inc. (Nasdaq: MGPI) is a leading producer of premium
distilled spirits, branded spirits, and food ingredient solutions.
Since 1941, we have combined our expertise and energy aimed at
formulating excellence, bringing product ideas to life
collaboratively with our customers.
As one of the largest distillers in the U.S.,
MGP’s offerings include bourbon and rye whiskeys, gins, and vodkas,
which are created at the intersection of science and imagination,
for customers of all sizes, from crafts to multinational brands.
With distilleries in Kentucky, Indiana and Kansas, and bottling
operations in Missouri, Ohio, and Northern Ireland, MGP has the
infrastructure and expertise to create on any scale.
MGP’s branded spirits portfolio covers a wide
spectrum of brands in every segment, including iconic brands from
Luxco, which was founded in 1958 by the Lux Family. Luxco is a
leading producer, supplier, importer and bottler of beverage
alcohol products. Our branded spirits mission is to meet the needs
and exceed the expectations of consumers, associates and business
partners. Luxco’s award-winning spirits portfolio includes
well-known brands from four distilleries: Bardstown, Kentucky-based
Lux Row Distillers, home of Ezra Brooks, Rebel, Blood Oath, David
Nicholson and Daviess County; Lebanon, Kentucky-based Limestone
Branch Distillery, maker of Yellowstone Kentucky Straight Bourbon
Whiskey, Minor Case Straight Rye Whiskey and Bowling & Burch
Gin; Jalisco, Mexico-based Destiladora González Lux, producer of
100% agave tequilas, El Mayor, Exotico and Dos Primos; and the
historic Ross & Squibb Distillery in Lawrenceburg, Indiana,
where the Remus Straight Bourbon Whiskey and Rossville Union
Straight Rye Whiskey are produced. The innovative and high-quality
brand portfolio also includes Everclear Grain Alcohol, Pearl Vodka,
Green Hat Gin, Saint Brendan’s Irish Cream, The Quiet Man Irish
Whiskey and other well-recognized brands.
In addition, our Ingredient Solutions segment
offers specialty proteins and starches that help customers harness
the power of plants and provide a host of functional, nutritional,
and sensory benefits for a wide range of food products.
The transformation of American grain into
something more is in the soul of our people, products, and history.
We’re devoted to unlocking the creative potential of this
extraordinary resource. For more information, visit
mgpingredients.com.
Cautionary Note Regarding
Forward-Looking StatementsThe forward-looking statements
contained herein include, but are not limited to, statements about
the expected effects on MGP Ingredients, Inc. (the "Company," or
"MGP") of continuing consumer trends and our announced expansionary
projects and the Company's outlook for 2023. Forward looking
statements are usually identified by or are associated with such
words as “intend,” “plan,” “believe,” “estimate,” “expect,”
“anticipate,” "project," "forecast," “hopeful,” “should,” “may,”
“will,” “could,” “encouraged,” “opportunities,” “potential,” and/or
the negatives or variations of these terms or similar
terminology.
These forward-looking statements reflect
management’s current beliefs and estimates of future economic
circumstances, industry conditions, Company performance, and
Company financial results and financial condition and are not
guarantees of future performance. All such forward-looking
statements are subject to certain risks and uncertainties that
could cause actual results to differ materially from those
contemplated by the relevant forward-looking statements. Important
factors that could cause actual results to differ materially from
our expectations include:
- the satisfaction of the conditions
to closing the transaction to acquire Penelope in the anticipated
timeframe or at all
- the ability to realize the
anticipated benefits of the acquisition of Penelope
- the ability to successfully
integrate the Penelope businesses
- disruption from the acquisition of
Penelope making it more difficult to maintain business and
operational relationships
- significant transaction costs and
unknown liabilities
- litigation or regulatory actions
related to the proposed acquisition of Penelope
- Our reliance on distributors to
adequately distribute our branded spirits within their
territories
- Risks related to acquisitions, the
competitive market in which we sell our products, and related
market conditions
- Potential adverse effects related
to the potential loss of key management personnel
For further information on these and other risks
and uncertainties that may affect our business, including risks
specific to our Distilling Solutions, Branded Spirits and
Ingredient Solutions segments, see Item 1A. Risk Factors of our
Annual Report on Form 10-K for the year ended December 31,
2022.
For More InformationInvestors
& Analysts:Mike Houston646-475-2998 or
investor.relations@mgpingredients.com
Media:Byrne PRPatrick Barry314-540-3865 or
patrick@byrnepr.net
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