United Spirits Limited, the flagship of The UB Group today
announced that it has acquired a hundred percent of Whyte & Mackay for
GBP 595m.
Whyte & Mackay is a leading distiller of Scotch Whisky, owning
brands including The Dalmore, Isle of Jura, Glayva, Fettercairn,
Vladivar vodka and the eponymous Whyte & Mackay blended Scotch. The
Company also owns several other Scotch Whisky brands such as
Mackinlays, John Barr, Cluny and Claymore amongst a host of others.
Whyte & Mackay is a key strategic acquisition for The UB Group and
its Chairman Dr. Vijay Mallya. In the last four years, Whyte & Mackay
has been transformed by a team led by Vivian Imerman. The company has
delivered strong revenue and profit growth as a result of
internationalizing its premium brands and maximizing the returns from
its attractive bulk whisky assets.
United Spirits sees significant revenue growth opportunities from
its acquisition of Whyte & Mackay. In particular, The UB Group will
provide access to India and other large emerging markets, allowing an
acceleration of Whyte & Mackay's growth plans.
Whyte & Mackay recorded sales of 9 million case and case
equivalents in the last 12 months. United Spirits recorded sales of 66
million cases for the year ended on March 31, 2007. With this
acquisition, United Spirits will have consolidated sales of 75 million
cases per annum.
At a time when global demand for Scotch Whisky is showing strong
growth and prices are increasing rapidly, Whyte & Mackay's bulk scotch
inventories of 115 million litres are not only very valuable but allow
United Spirits the opportunity to meet their own growing requirements
for their brands in India.
The Invergordon Distillery, near Inverness, is one of the largest
Scotch Whisky distilleries with a capacity of producing 40 million
litres of alcohol per annum. This production resource will provide
United Spirits with a perennial source of Scotch Whisky to meet its
global requirements in the future. In addition, Invergordon will
remain a key strategic provider of bulk Scotch Whisky to industry
majors.
Whyte & Mackay also owns four malt whisky distilleries in Scotland
and a state of the art bottling facility in Grangemouth with a
capacity of producing 12 million cases per annum. Imerman was
appointed CEO at the start of 2003, and took majority control of Whyte
& Mackay in 2005. At that time, Imerman set out a vision to turn Whyte
& Mackay into an international premium spirits business. He and his
management team have since delivered on all of the milestones that
were set at the time, they have refinanced the business, reorganized
the structure, eliminated costs and complexities, taken control of UK
sales and distribution, established key international distribution,
re-branded the product line, and led the increases in bulk and
own-label whisky prices by buying up excess stock in the market.
Dr Vijay Mallya, Chairman of United Spirits Limited said "We have
a large and growing business in India and have made recent forays into
Russia and China. United Spirits have created some of the world's
largest brands of drinks. Until today, the only missing link in our
portfolio has been Scotch and due to the shortages and rapidly
increasing prices of Scotch Whisky, we needed a reliable supply source
to secure our future considering that we use scotch in our Indian
blends. The potential for premium Scotch Whisky in India is enormous
and, with the acquisition of Whyte & Mackay we now have a strong
portfolio of internationally recognized brands that we will
immediately introduce into the Indian market and use our strong
distribution muscle fully to our advantage. In addition we now have
access to international distribution and can look forward to exporting
our brands from India."
Dr. Mallya added "Given the very valuable Scotch Whisky
inventories and production assets, a significant part of the
acquisition debt is in the target with no recourse to United Spirits.
I have repeatedly stated that we will not over pay in any acquisition
and I am satisfied that the price agreed is attractive. Further, the
combined profits of United Spirits and Whyte & Mackay are expected to
be earnings accretive from the first completed year of operations
after accounting for the cost of funds applied to the acquisition."
Vivian Imerman stated, "With The UB Group's ability to sell and
market brands, Whyte & Mackay will be taken to a new level again. This
is now a great company and is going to a great home. The annual
operating income of Whyte & Mackay is now approximately GBP 50 million
and I expect it to grow at the rate of 20% plus, per annum, for the
foreseeable future while the revenue line has grown 30% in current
year. Vijay is a world-class businessman with honour, integrity, flair
and a great instinct for business. I look forward to working together
with him to further build a premium international spirits business."
Vivian Imerman will remain with the Whyte & Mackay group as a
Strategic Advisor to the Chairman and Chief Executive, Dr. Vijay
Mallya.
Acquisition finance for the transaction to United Spirits was
arranged and provided by ICICI Bank and Citibank.
United Spirits was advised by UBS, ICICI Bank and Standard
Chartered. Whyte & Mackay was advised by Citigroup.
For further details, please visit www.theubgroup.com/w&m.html
Media queries to be addressed to: Prakash Mirpuri, Sr. General
Manager-Corporate Media Relations, The UB Group, pmirpuri@ubmail.com/
Mobile: +91-98210-91715