It’s the fastest growing super-premium tequila brand in the U.S., Diageo said.
The transaction values Casamigos at up to $1 billion, with initial consideration set at $700 million and a further potential $300 million based on a performance linked earn-out over 10 years, reflecting the brand’s exceptional growth trajectory and upside potential.
Casamigos was created in 2013 by founders Rande Gerber, George Clooney and Mike Meldman. The essence of the brand, “made by friends for friends,” is reflected in the name, Casamigos or ‘house of friends.’ The brand reached 120,000 cases in 2016, primarily in the U.S., and a CAGR of 54% in the last two years. The brand is on track to reach over 170k cases by the end of 2017.
The transaction is expected to close in the second half of calendar 2017, subject to regulatory clearances. Diageo expects the transaction will be EPS neutral for the first three years and accretive thereafter. We expect the acquisition will be economic profit positive in the fourth full fiscal year post-completion.
The acquisition will be funded through existing cash resources and debt.