The transaction, which carries a unanimous recommendation from The Lake’s board of directors, values the spirits company at GBP46.1m [US$57.9m]. Including the current level of debt, however, the purchase carries a price tag of GBP71m [$89.2m].
Nyetimber, which owns the namesake English sparkling wine brand, has secured the support of almost 28% of The Lakes’ shareholders, with at least 75% approval required to proceed.
“The Lakes board is enthusiastic about its ambitious new ten-year plan to achieve a 1% share of the global luxury dark spirits market by 2030,” said CEO James Pennefather. “This plan entails an additional funding requirement of GBP10m over the next three years to provide the necessary growth capital to increase production capacity, to further invest in laying down maturing spirit stocks and to grow the brand’s footprint in international markets.
“The offer by Nyetimber offers the prospect of an owner with the same shared strategic vision and crucially, certainty of funding.”
Pennefather’s peer at Nyetimber, Eric Heerema, added: “We believe that this potential acquisition represents an opportunity for us to expand our capabilities, drive exciting new growth and support The Lakes in delivering on its ambition to be a globally recognised spirits brand.”
Pending shareholder support, the purchase is expected to complete by the end of June.
Located near Bassenthwaite Lake in England’s Lake District, The distiller, which produces single malt whisky as well as a gin and a vodka under its namesake brand, commenced distillation ten years ago. Since then, The Lakes has found raising capital challenging, culminating in its admission that “there is a degree of uncertainty around The Lakes’ ability to fully fund the business as an independent entity without compromising the ten year plan”.
Nyetimber, meanwhile, has benefitted from the rising profile for English sparkling wine in recent years: In November, the company secured ‘official sparkling wine’ status for its namesake brand with Team GB at this year’s Olympic Games.
