TIDMDGE
RNS Number : 3235W
Diageo PLC
17 August 2020
17 August 2020
Diageo to acquire Aviation Gin and Davos Brands
Today, Diageo announces it has reached agreement to acquire
Aviation American Gin through the acquisition of Aviation Gin LLC
and Davos Brands LLC ('Davos Brands').
Aviation American Gin is an American style gin crafted with a
blend of botanicals, with subtle juniper notes, delivering a smooth
balanced flavour profile. The brand has thrived under the
leadership of its majority owner, Davos Brands, and the creative
direction of co-owner Ryan Reynolds, who will retain an ongoing
ownership interest in Aviation American Gin. Through this
acquisition, Diageo is also acquiring the other brands in the Davos
Brands' portfolio consisting of Astral Tequila, Sombra Mezcal and
TYKU Sake.
The total consideration is up to $610 million, which includes an
initial payment of $335 million and a further potential
consideration of up to $275 million based on the performance of
Aviation American Gin over a ten- year period. This reflects the
brand's current growth trajectory and expected upside
potential.
Commenting today Ivan Menezes, Chief Executive of Diageo, said
"We are delighted to announce this transaction, which supports our
participation in the super premium gin segment in the United
States. The acquisition of Aviation American Gin and the Davos
Brands portfolio is in line with our strategy to acquire high
growth brands with attractive margins that support premiumisation.
We are confident that Aviation American Gin will continue to shape
and drive the growth of super premium gin in North America and we
are looking forward to working with Ryan Reynolds and the Davos
Brands team to accelerate future growth."
Ryan Reynolds commented "A little over two years ago, I became
an owner of Aviation Gin because I love the taste of Aviation more
than any other spirit. What I didn't expect was the sheer creative
joy learning a new industry would bring. Growing the brand with my
company, Maximum Effort Marketing, has been among the most
fulfilling projects I've ever been involved with. I want to thank
Diageo for their incredible team and passion. We're so excited for
the next chapter of Aviation Gin, which, I promise, will require
just as little reading."
Aviation American Gin is the second largest and one of the
fastest growing brands within the super premium gin segment in the
United States, having disrupted the gin category with its modern
craft credentials [1] . In 2019, it grew volumes at over 100%,
adding the highest number of cases and contributing 40% of super
premium gin segment growth. [2] The brand is well positioned to
continue recruiting consumers into gin with its accessible flavour
profile and American provenance.
The super-premium segment of the gin category is gaining
momentum in the United States. Having more than doubled its share
of the gin category between 2014 and 2019, it grew at a compound
annual growth rate of 18.5% - making it the fastest growing spirits
segment in the United States [3] . A number of trends are
supporting this growth, including consumer interest in quality
ingredients like botanicals, in the variety of serves for gin and
in craft spirits.
Davos Brands, founded in 2014, specialises in identifying key
trends and early stage brands as well as creating and executing
sales and marketing strategies for high growth brands in high
growth categories. The acquisition of Davos Brands also provides
the opportunity to further develop the other brands in the
portfolio by benefiting from Diageo's expertise.
Andrew T. Chrisomalis, Co-Founder and CEO of Davos Brands,
commented "Brands are an evolution, reflecting the vision and
values of their founders, sculptors and stewards. Extraordinary
partnership and teamwork brought us here, and with the continued
creative genius of Ryan Reynolds, and this new, best in class
global partnership with Diageo, the sky is truly the limit for
Aviation American Gin and Davos Brands."
Debra Crew, President Diageo North America, commented "I am
excited by the opportunity to bring these brands into Diageo. We
believe Aviation American Gin will play an important role in
building on the long term premiumisation trends in the United
States. The entrepreneurialism of the Davos team and Ryan Reynolds
combined with Diageo's strengths will help drive the continued
momentum of the brand in North America and we feel confident that
with Ryan's global reach that Aviation Gin can expand
internationally."
The acquisition will be funded through existing cash and is
expected to close before the end of 2020, subject to regulatory
clearances.
ENDS
Enquiries:
Media relations: Global
Jessica Rouleau +44 (0)7925 642 561
Dominic Redfearn +44 (0)7971 977 759
press@diageo.com +44 (0)7803 856 200
North America
Kristen Crofoot +1 917-445-2835
Caroline Rhodes +1 475-245-1277
Investor relations: Lucinda Baker +44 (0)7974 375 550
investor.relations@diageo.com
About Diageo
Diageo is a global leader in beverage alcohol with an
outstanding collection of brands including Johnnie Walker, Crown
Royal, J B, Buchanan's and Windsor whiskies, Smirnoff, Cîroc and
Ketel One vodkas, Captain Morgan, Baileys, Don Julio, Tanqueray and
Guinness.
Diageo is a global company whose products are sold in more than
180 countries around the world. The company is listed on both the
London Stock Exchange (DGE) and the New York Stock Exchange (DEO).
For more information about Diageo, our people, our brands, and
performance, visit us at www.diageo.com . Visit Diageo's global
responsible drinking resource, www.DRINKiQ.com , for information,
initiatives and ways to share best practice.
Celebrating life, every day, everywhere.
About Davos Brands
Our mission is to build and develop the highest quality, best in
class spirits brands that create a meaningful and valuable
connection with consumers. We do this through teamwork, passion,
innovation, entrepreneurial spirit, and relentless perseverance.
The Davos Brands team operates in a collegiate, open-structure, and
dynamic mode. Based in New York, the Davos Brands luxury portfolio
includes owned brands Aviation Gin, TYKU Sake, Sombra Mezcal, &
Astral Tequila.
Diageo plc LEI: 213800ZVIELEA55JMJ32
[1] IWSR, 2019.
[2] IWSR, 2019.
[3] IWSR, 2019.
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END
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