Gruppo Campari scratched its seven year itch by selling Carolan’s Irish Cream Liqueur and Irish Mist Liqueur, brands they acquired in 2010. Heaven Hill Brands has signed an agreement to acquire the brands for $165 million through the purchase of 100% of the share capital of TJ Carolan & Son Ltd., a wholly owned subsidiary of Gruppo Campari.
The agreed acquisition of Carolan’s and Irish Mist complements Heaven Hill Brands’ robust and growing portfolio. Carolan’s is the second-largest selling Irish cream whiskey liqueur world-wide. The product is produced in Ireland from ingredients including fresh cream, honey and Irish whiskey. Irish Mist has a long heritage as the first liqueur to be produced in Ireland. The Liqueur is a blend of Irish whiskey, honey and natural aromatic spices.
Gruppo Campari says that in the fiscal year ended December 31 2016 Carolans and Irish Mist achieved total net sales of € 34.0 million and CAAP (Contribution after A&P) of € 16.3 million. The brands’ sales represented approximately 2% of Gruppo Campari net sales in fiscal year 2016. The U.S. is the brands’ core market, accounting for 70% of the 2016 net sales. The overall deal consideration corresponds to a CAAP multiple of approximately 9 times.
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“We are excited to add to Carolan’s and Irish Mist to our portfolio of leading brands,” said Max L. Shapira, president, Heaven Hill Brands. “The historic brands are certainly complementary fits for a Heaven Hill portfolio built on quality and innovation. We look forward to building on the success these brands have achieved both in the US and around the world.”
The Cream Liqueur segment of the industry has been a significant and stable category for decades. Representing approximately 3,000,000 cases, the cream category’s largest brands are nearly 20 percent of the total imported liqueur market in the U.S. Carolan’s has grown over six percent since 2010 outpacing the bulk of the Cream Liqueur category.
Bob Kunze-Concewitz, Chief Executive Officer–Gruppo Campari said, “The sale of Carolans and Irish Mist is the largest disposal ever completed by the Group. We are very pleased to sign this transaction with Heaven Hill, a prominent spirits company in the US and a perfect fit for Carolans and Irish Mist. With this transaction, we continue to streamline our non-strategic portfolio and further increase our focus on our priority spirit brands, particularly in our largest and core US market. Moreover, thanks to this disposal, we can further accelerate in the reduction of our financial indebtedness. Since the beginning of 2016 we have divested non-strategic assets for a total value of approximately € 260 million.”
Irish Whiskey Category Up 150%
Likewise, the Irish Whiskey category, with which Irish Mist is closely related, has experienced similar growth dynamics to American Whiskey. Since 2010, the category is up over 150 percent and expected to continue that significant growth for many years to come. A companion Irish Mist Blended Irish Whiskey was introduced in 2014.
Carolan’s Irish Cream was developed in 1978 and first launched in the UK in July 1979. Since then the brand has grown steadily and established itself as the world’s No. 2 Irish Cream Liqueur with sales in over 40 countries. Its superior taste is derived from the subtle blending of flavors, including natural honey sourced from the Clonmel area in Ireland – the word “Clonmel” derives from the Gaelic “Cluain Meala” which means Vale of Honey. Carolan’s Irish Cream is named after the celebrated 17th century harpist, Turlough O’Carolan, a legendary travelling musician of that time.
According to The National Museum of Ireland, Turlough O’Carolan (1670 – 1738) is widely regarded today as Ireland’s national composer. Many of his tunes are still played today, and some compositions have been performed by popular artists such as Planxty, The Chieftains and The Dubliners.
Irish Mist was the first liqueur to be produced in Ireland at Tullamore, County Offaly. The company history goes back to 1829 when the Tullamore Distillery was founded to produce Irish whiskey.
Irish Mist is a blend of Irish whiskey, honey and natural aromatic spices. It was the first liqueur to be produced in Ireland and, while the bottle has changed a number of times over the years, the liqueur itself has remained true to its origins – the recipe has not changed.
Heaven Hill has been active over a long period of time in expanding its portfolio through internal product innovation and acquisitions. Prior to the current agreed acquisition of Carolan’s and Irish Mist, in 2015 the company acquired Deep Eddy Vodka, one of the fastest growing Vodkas in the U.S.
As part of the transaction and effective from closing, Gruppo Campari and Heaven Hill Brands will enter into a multi-year exclusive distribution agreement, under which Gruppo Campari will continue to distribute the Carolans and Irish Mist brands in the international markets outside the United States. The Carolan’s Irish Cream Liqueur and Irish Mist Liqueur sale from Gruppo Campari to Heaven Hill Brands is expected to close August 1, 2017.