Wilderness Trail Distillery - Co-Founders Shane Baker and Dr. Patrick Heist

Wilderness Trail Distillery in Danville, Kentucky has sold a 70% majority interest to Campari Group for $420 million. Campari has an option to buy the additional 30% by 2031 valuing the entire transaction at $600 million.

Wilderness Trail Distillery was founded in 2012 by Shane Baker and Dr. Patrick Heist. Prior to the distillery the two started Ferm Solutions a leading research, product development, engineering and technical service provider to the ethanol and distilled spirits industries. Ferm Solutions is not a part of this transaction.

The $600 million valuation makes it the second biggest acquisition for the Italian group after it bought Grand Marnier in 2016.

‘We are thrilled about our partnership with Campari Group,” said Shane Baker and Dr. Pat Heist, Co-Founders of Wilderness Trail Distillery. “Premium bourbon and rye whiskies and state-of-the art production facilities coupled with worldwide distribution, first class marketing and expertise across multiple spirit categories provide the perfect foundation for the continued success of the Wilderness Trail brand and ensure it will be enjoyed around the world for years to come.

“This is a win-win situation for both parties and we are very proud of this partnership and what we can achieve together with our shared vision.”

Wilderness Trail Distillery is on a 10-Year Roll

Bourbon on the Banks - Wilderness Trail Distillery Family Reserve Cask Strength Rye Whiskey with Haley Perros
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Wilderness Trail was founded in 2012 by Shane Baker and Dr. Patrick Heist. They started out as a small craft distillery in downtown Danville, Boyle County, Kentucky making two barrels of bourbon a day.

In 2016 they purchased some land on the outskirts of town and turned a corn field into one of the most advanced distilleries in the U.S. The new facility allowed them to expand initial production to a dozen barrels of Kentucky bourbon whiskey per day. That number doubled to 24 when they added a second shift. They were on a roll.  

Some of this production was for their own Wilderness Trail bourbon and rye brands while the majority of their whiskey was being contract distilled for other distilleries.

In 2017 they expanded yet again. This time added a second Vendome Copper & Brass Works column still. Their 2016 column was 18”. Their newest still was a 36” column still. Once operational the plans for the next expansion were already under way. In 2021 they added new cookers and fermentation tanks to feed their hungry columns stills. With all this equipment and knowledge, they can produce north of a quarter million barrels of Kentucky bourbon and rye whiskey per year.

The distillery’s proprietary infusion mashing process and sweet mash technique have a highly flexible output driven by the multiple mash bills and yeast strains, crafting bourbons and rye whiskeys with distinctive flavors.

Is the $420 Selling Price a Connection to Marijuana (À la Elon Musk and Twitter)?

Wilderness Trail Distillery - 18 Inch Column Still and 36 Ince Column Still
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18″ and 36 ” column stills.

When Elon Musk made his initial offer to purchase Twitter he made sure he got 420 in the purchase price by offering $54.20 per share. 420, 4:20 or 4/20 are common references to marijuana. 4:20pm being the time of day to smoke pot and 4/20 is a day known as an international pot-smoking day.

Any connection? We reached out to Baker and Heist for clarification. And as per usual, even on a day as busy as today for this company, they were quick to reply.

“LOL no connection,” said Baker. “That just resulted as a part of the percentage of the deal but that is some cool thinking…” Perhaps we’ll see a cannabis infused whiskey in their future?

Baker and Heist will continue with their day-to-day duties of running one of the largest bourbon and rye whiskey companies in the world.

“Nothing changes, we remain at the helm of Wilderness and are locked in to see its growth come to fruition.”

And similar thing will be true in 2031 around the time that Campari Group is expected to purchase the remaining 30% of the distillery.

Wilderness Trail Distillery - Owners Dr. Pat Heist and Shane Baker
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“Same here, we are the founders and brand ambassadors for life, sort of like the old westerns, you will have to pry a Wilderness Bottle from my dead hands, we don’t plan on going anywhere but growing with the brand.”
Shane Baker and Dr. Patrick Heist.
Wilderness Trail Distiller Co-Founders

Campari Group Expands its Premium Whiskey Portfolio

Wilderness Trail Distillery - Aerial Photo c 2019
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‘We are very excited to take a controlling interest in world-class Wilderness Trail Distillery,” said Bob Kunze-Concewitz, Chief Executive Officer Campari Group. “ By adding the fast-growing super premium Wilderness Trail brand we further expand and premiumise our bourbon offering, priming it to become Campari Group’s second major leg after the aperitif portfolio.

“Moreover, we accelerate our premiumization journey, further enriching our RARE portfolio, the division aimed to unlock and accelerate the growth potential of a select range of high-end individual expressions in our core premium spirits markets. In addition, we have the opportunity to significantly expand our production capacity and ageing inventory to satisfy the future growth of our premium bourbons, such as the high potential Whiskey Barons range, currently capped due to capacity constraints. We are very excited to partner with such a strong team of industry pioneers and distilling experts allowing us to accelerate and significantly expand the innovation platform for our bourbon portfolio.”

Campari Groups Bourbon Journey

Campari Group’s bourbon journey started in 2009 via the acquisition of the Wild Turkey brand and distillery. Since then, Campari Group has relentlessly focused on the premiumization journey of the Wild Turkey franchise, featuring also the upgrade and growth acceleration of craft bourbon Russell’s Reserve and the launch of small-batch bourbon Longbranch in 2018 in partnership with Matthew McConaughey. In 2017 Campari Group also launched its ultra-premium Whisky Barons Collection, including Old Ripy, Bond & Lillard and William Butler Saffell. Lastly, in August 2022, Campari acquired an initial minority interest with path to control in Howler Head, a Kentucky Straight Bourbon Whiskey with Natural Banana Flavor, together with exclusive global distribution rights.

American whiskey is currently among the hottest spirits category in the US market, leveraging the continued positive trend across brown spirits, premium classic cocktail revival and mixology. It accounted for 13% of the total US spirits markets in 2021 in value terms, showing a growth of 7% versus previous year with the super-premium price segment outperforming at +17%.

For the fiscal year ended on 31 December 2021, the acquired business achieved overall net sales of USD40.8 million, including net sales from Wilderness Trail Distillery bourbon and rye brand of USD7.2 million and the balance generated by bulk sales as well as storage fees and visitor centre, and an EBITDA of USD22.7 million under US GAAP.

For the fiscal year ending on 31 December 2022, the acquired business is expected to generate overall sales of c. USD57 million, an increase of c.39% vs. previous year, with an increasing weight of the higher margin business generated by the Wilderness Trail bourbon and rye brand versus bulk sales, and an EBITDA of c. USD37 million under local GAAP (an increase of c.64% vs. previous year).

The consideration amounts to USD420 million (or €420 million) for the initial 70% of the outstanding capital. The corresponding enterprise value for 100% of the outstanding capital is USD600 million (or €600 million), on a cash free/debt free basis, equivalent to a multiple of c.16 times the expected 2022 EBITDA.

Campari Group will acquire the remaining 30% of the outstanding capital subject to a call/put option exercisable in 2031 at an enterprise value determined by applying the above multiple to the higher of 2030 or average of 2028-2030 EBITDA.

As of 30 September 2022, the inventory’s book value amounted to USD24.0 million, exclusively composed of Wilderness Trail bourbon and rye (bulk production is sold as new make hence no inventory is built on bulk).

The purchase price to be paid at the closing will be funded using a combination of available cash and bank term loans. As a result of the acquisition, Campari Group’s Net debt/EBITDA-adjusted on a pro-forma basis is expected to increase from current 1.5 times to 2.3 times upon the deal closing on a pro-forma basis.

The transaction, which is subject to customary closing conditions, is expected to close before the end of the 2022 calendar year. Until the transaction closes, each company will continue to operate independently.

William Blair & Company acted as exclusive financial advisor to the sellers and Benesch, Friedlander, Coplan and Aronoff LLP acted as their legal advisor. McDermott Will & Emery LLP acted as tax and legal advisor to Campari Group.

Congrats to Shane Baker and Dr. Pat Heist on building a solid company and making a difference in so many peoples lives.

Well done. Cheers!

Learn more about Wilderness Trail Distillery.
View all Kentucky Distilleries.
View all U.S. Distilleries.
Order Wilderness Trail Bourbon and Rye whiskey online here.

Campari Purchased Wild Turkey Distillery in 2009 for $575 Million

For comparison purposes Gruppo Campari purchased another well-known Kentucky bourbon distillery back in April of 2009. It was about 13 years ago that Campari purchased Wild Turkey from Pernod Ricard in an all cash deal. At the time, it was the largest acquisition in Campari’s history.

An April 2009 press release summarized the purchase like this.

“The acquired business includes the Wild Turkey brands, American Honey liqueur, distillery facilities in Kentucky, USA, and aged liquid and finished product inventory.

The total purchase price for the acquisition is US$ 575 million (or € 433 million at current exchange rate), corresponding to 9.7 times the historic CAAP (Contribution after Advertising and Promotion expenses) and 12 times the expected EBITDA in the first 12 months following the deal’s closing. The transaction, subject to antitrust approvals, is expected to close prior to June 30, 2009 and the consideration will be paid for in cash.

Following this acquisition, the weight of the Group’s business outside Italy is expected to increase to almost two-thirds of its sales.

Bob Kunze-Concewitz, Chief Executive Officer: “With Wild Turkey Campari adds a brand of strategic relevance to its portfolio and further enhances its premium offering. This acquisition is another key step in the building of a leading player in the global spirits industry. It is a unique opportunity to enter the attractive bourbon whiskey category and exploit its growth potential through a global and leading brand. The transaction demonstrates our commitment, in line with our strategy, of continuing growth in the profitable US spirit’s market. In addition, Campari expands its presence in key international markets such as Australia, where the acquisition provides the foundation for establishing its own distribution platform, and Japan.”

This deal is the fourth acquisition concluded by Campari in the USA, after SKYY Vodka (2002), Cabo Wabo (2007) and X-Rated (2007). With Wild Turkey, the total investment by Campari in US acquisitions amounts to USD 1.1 billion (€ 0.9 billion). Together with the Company’s long-term approach to business, this underlines its solidity, extremely robust cash flow generation as well as a strong capital structure.

Wild Turkey is a global brand with a total volume above 800,000 nine-liter cases sold in over 60 markets. The US is the brand’s largest market, accounting for almost one-half of the brand’s sales; Australia and Japan are respectively its second and third largest markets. The brand enjoys a successful track record of continuous growth in its category in key geographic markets. The Page 2 of 2 American straight whiskey is a dynamic spirits category, with a premium and super premium offering driving the growth in the US as well as in the international markets.

In addition, the acquisition brings Wild Turkey American Honey, a honey and bourbon-based liqueur, a successful new entry into the premium US cordial category and a substantial growth opportunity.

Wild Turkey has a unique brand image built around values of authenticity, distinctive flavour and taste, and genuine and uncompromising brand positioning. These characteristics enable it to be positioned in the premium segment globally. Wild Turkey has all the attributes – authenticity, premiumness, heritage – to successfully exploit its category and market growth potential.

The transaction will be financed through credit facilities underwritten by four major banks: Bank of America, BNP Paribas, Calyon and Intesa San Paolo. Legal advisors are Morrison & Foerster on the transaction and Allen & Overy on the funding.”

What Did Campari Pay for Wild Turkey Distillery in Today’s Dollars?

Based on inflation over the last 13 years the $575 million Campari paid for Wild Turkey in 2009 would be worth about $762.6 million in 2022 dollars.

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