C&C sells spirits division for €300m

Drinks group C&C has agreed to sell its spirits division for €300 million to William Grant & Sons.

The disposal is subject to C&C shareholder approval, the group said in a statement today.

C&C said proceeds from the sale will be applied towards debt reduction. The disposal will result in a pro-forma net debt to Ebitda (Earnings Before Interest, Taxes, Depreciation and Amortisation) of 0.6 times, based on the group’s 2009/10 financial performance.

The group's spirits division includes brands such as Tullamore Dew, Carolans, Frangelico and Irish Mist - which are exported to over 80 international markets.

For the year to the end of February 2009, the division generated revenue of €85.9 million, Ebitda before exceptional items of €16.1 million and Ebit (Earnings Before Interest and Taxes) before exceptional items of €15.3 million.

For the year to the end of February 2010, the division is expected to report Ebitda of approximately €15.3 million and Ebit of €14.7 million.

The gross assets of the division amounted to approximately €109.7 million.

C&C said that following the disposal, the group will retain certain overhead costs which are currently allocated to the division. This overhead was €1.5 million in the 2009/10 financial year.

The division's 57 employees will transfer with the business. William Grant has confirmed its commitment to building a strong business in Ireland and to maintaining and developing current operations across the Irish sites including C&C’s manufacturing site in Clonmel, Co Tipperary.

William Grant & Sons is an independent family-owned distiller headquartered in Scotland. The company distils some of the world’s leading brands of Scotch whisky, including the world’s most awarded single malt Glenfiddich.

Tony O’Brien, C&C Group chairman said agreement to sell to William Grant was not an easy one to make but was one that was taken in the best interests of shareholders.

The transaction is expected to be completed on June 30th.

C&C will announce results for the 12 months to the end of Februaryon the  May 25th.