C&C acquires US cider brand

Irish drinks company C&C has acquired Hornsby’s, the second-biggest cider brand in the US, for €20 million.

C&C will pay €16.4 million in cash to Californian-based owner Gallo, with up to a further €3.6 million payable subject to the achievement of performance targets in the period to April 2012.

C&C, which sells its Magners brand into the US, said the acquisition will complement Magners' existing position in the US. This is because Hornsby's is primarily an off-trade and West coast of the US brand, while Magners is an on-trade and East coast brand.

Hornsby's currently has 35 per cent of the off-trade cider market in the US. Revenues for the year ended December 2010 were $11.7 million (€8.5 million). C&C said the business is expected to generate a contribution of €3.6 million to C&C during the year ended December 2011, after marketing costs and before estimated overheads approximately €1.4 million. Hornsby's is currently delivering low single-digit revenue and volume growth.

Cider category volumes are growing at approximately 20 per cent per annum in the US, C&C estimates.

Following the acquisition, C&C will become the number two US cider company with an estimated 20 per cent share of the cider category.