Scots whisky firm sold to French in £58m deal
Published by Anne Marie Hughes on Tue 24 Jul 12 @ 9:47
Bruichladdich Distillery Company shareholders are expected to receive large windfalls equivalent to more than seven times their initial investment after the whisky business was sold for £58 million.
French drinks giant Rémy Cointreau is moving into the whisky sector for the first time by paying £48m in cash and assuming around £10m in debt to take on the Islay company.
It is thought to be the largest transaction ever involving a single whisky distillery.
The deal is due to complete within the next six weeks and the new owner plans to increase production capacity, a move which may bring further jobs.
All 50 staff from Bruichladdich, the largest private-sector employer on Islay, are among the shareholders looking at payouts which could run into hundreds of thousands of pounds.
Managing director Mark Reynier, one of the founders who raised £6.5m from investors to buy the mothballed distillery in 2000, declined to specify the sums investors would receive but said there are 60 shareholders who will benefit. He expected there to be one or two parties on Islay as a result of the deal.
Mr Reynier, the only one of the eight board directors to vote against the deal, said nonetheless: "It is good for Bruichladdich and Rémy are the perfect people to work with. They have exactly the right idea and get what we have done. There are other people and brands they could have got hold of but they wanted Bruichladdich.
"We get three takeover approaches a year and most of them are barking mad. When this turned up out of the blue in March, it was clearly a very serious proposition.
"Our chairman is obliged to consider the shareholders and not personal views or opinions.
"We did not have people screaming to sell up but they know a good deal when they see one."
The company's annual return shows Mr Reynier is among the largest individual shareholders with more than 10,000 across A, B and D ordinary shares.
Operations director Simon Coughlin holds around 7900 shares, while production director Jim McEwan has more than 1900.
Due to the sale, A shares will be converted into B shares dependent on a metric based on the internal rate of return.
Mr Reynier has been offered a role to remain with the business but has not yet decided whether to take it up.
He said the deal caused him slight regret as Bruichladdich sales were about "to go like a rocket" and are around 60% up in the first half of 2012.
He added: "The struggle in getting to this position cannot be underestimated. We took on a distillery that was dead and buried. With blood, sweat and tears, we dragged it back up into worldwide renown.
"Now we are in an exciting business phase as the concepts we have been talking about for a decade are now approaching maturity.
"Rémy are taking a very long view, which is encouraging. They know they can expand Bruichladdich quicker than we could do on our own.
"I respect what they are doing as a company. They have some great ideas, some really exciting people and Bruichladdich fits their philosophy."
The bulk of Bruichladdich sales at the moment are in the UK, France, Germany and Canada and Rémy has plans to take the brand into the Far East and Asia.
Jean-Marie Laborde, chief executive officer of Rémy Cointreau, said: "The acquisition of Bruichladdich, renowned Islay single malt with a rich and exciting heritage, is a great opportunity to enrich our high-end portfolio of brands and to confirm our strategy in the spirits luxury segment.
"We expect Bruichladdich to sit proudly alongside our other brands and we look forward to working closely with Bruichladdich's experienced and passionate management team."
Bruichladdich chairman Sir John Mactaggart said: "This is an excellent transaction for Bruichladdich, the Islay community and a wonderful opportunity for the company to reach its full potential, under the stewardship of Rémy Cointreau."