Brown-Forman Corporation announced that it has reached an agreement to sell its Southern Comfort and Tuaca trademarks to Sazerac for $543.5 million.
Brown-Forman Chief Executive Officer Paul Varga said the decision to sell these brands reflects the company’s evolving portfolio strategy and a continuation of its efforts to focus resources on its highest strategic priorities. Brown-Forman has actively managed its portfolio over the last decade by developing, acquiring and divesting specific brands and categories with the aim of improving the growth and value creation prospects for its business.
“We’re proud of the work undertaken over the years by our employees and partners on behalf of Southern Comfort and Tuaca,” stated Varga. “Both brands played important roles in the Brown-Forman success story, and we will have fond memories of the enjoyment they brought to consumers, our partners, and to Brown-Forman.”
Brown-Forman has marketed Southern Comfort since acquiring the brand in 1979. The company acquired Tuaca in two transactions, completing the purchase in 2002.
“We are very excited about the opportunity to acquire such iconic brands. Brown-Forman has done an excellent job of building both brands over the years and we are looking forward to many more years of successful brand building,” said Mark Brown, President / CEO of the Sazerac Company.
The sale of these brands is expected to close by March 1, 2016 resulting in a one-time operating income gain for Brown-Forman of approximately $475 million in fiscal 2016. The transaction, which is subject to regulatory clearance in the U.S. and customary closing conditions, will be discussed in further detail during Brown-Forman’s March conference call following the issuance of its third quarter earnings release.
Goldman, Sachs & Co. and Gibson, Dunn & Crutcher LLP advised Brown-Forman in this transaction.
Cooley LLP provided legal advice to Sazerac. Wells Fargo Securities provided Sazerac financial advice and led the committed financing for the transaction.
For more information about Brown-Forman, visit http://www.brown-forman.com.