Pernod Ricard’s US Portfolio Grows with Castle Brands Acquisition

August 28, 2019 – Pernod Ricard Chairman and CEO Alexandre Ricard sees the United States as his company’s most important market, and is investing heavily to build up Pernod Ricard’s American whiskey portfolio. The latest move sees Pernod Ricard paying approximately $223 million USD to acquire Castle Brands, which makes Jefferson’s Bourbon along with the Knappogue Castle and Clontarf Irish whiskey brands and other spirits. Castle Brands shareholders will receive $1.27 per share in cash when the deal closes in the fourth quarter of 2019.

This is the third Bourbon-related acquisition for Pernod Ricard in recent months. In June, the company acquired majority ownership in Louisville-based Rabbit Hole Distilling through its US-based New Brand Ventures unit, with founder Kaveh Zamanian retaining a minority stake and remaining in control of day-to-day operations. A month later, Pernod Ricard acquired Firestone & Robertson Distilling in Fort Worth, Texas for an undisclosed price. Until those deals, Pernod Ricard’s only US-based distillery and brands were the Smooth Ambler whiskies made in West Virginia, which were acquired in a New Brand Ventures deal in 2016.

“This deal aligns well with our consumer-centric strategy to offer our consumers the broadest line-up of high-quality premium brands, “Alexandre Ricard said in a news release. “As with our American whiskies Smooth Ambler, Rabbit Hole and TX, we would provide Jefferson’s a strong route to market and secure its long-term development, while remaining true to its authentic and innovative character.”

Castle Brands produces its Jefferson’s Bourbon expressions at the Kentucky Artisan Distillery in Crestwood, Texas using whiskey from that distillery and other distilleries under contract. The company is an investor in Kentucky Artisan Distillery, and that ownership stake is expected to transfer to Pernod Ricard when the deal closes.

Castle also serves as the U.S. importer for Isle of Arran Distillers and its Arran, Robert Burns, and Machrie Moor Scotch whiskies. While those brands were mentioned in the news releases announcing the deal, Arran managing director Euan Mitchell has confirmed to WhiskyCast that his independently-owned company will be looking for a new importer to re-launch its whiskies in the United States once the deal closes. Pernod Ricard’s U.S. unit does not handle imports for so-called “agency brands,” according to Mitchell.

The move also leaves unclear the future for Castle’s two Irish whiskey brands. Knappogue Castle and Clontarf. Knappogue Castle was the company’s original brand when Chairman Mark Andrews founded the company in 1988, and took its name from the castle his parents owned in Ireland. Clontarf was added to the portfolio later as a value entry in the Irish whiskey market, and both brands use whiskey sourced from distillers in Ireland. Pernod Ricard’s Dublin-based Irish Distillers unit has been focusing in recent years on its premium brands, including Redbreast, Powers, Midleton, and Jameson. The division sold Paddy, one of its original brands dating back to the 1965 merger of the three remaining Irish distilling families, to Sazerac in 2016. Pernod Ricard executives have not disclosed their plans for Knappogue Castle and Clontarf once the Castle Brands acquisition closes.

Links: Pernod Ricard | Castle Brands