BC Partners Wins Cantrell & Cochrane –

The year began on a high note for BC Partners, which in the second week of January bought Cantrell & Cochrane Group, Ireland’s leading distributor of alcoholic and soft drinks, in a euro 800 million ($928 million) deal.

The closure of the deal comes after speculation that the U.K.-based private equity group had been eyeing the drink distributor after the start of the new year (BUYOUTS Jan. 11, p. 24).

BC Partners acquired Cantrell & Cochrane from Allied Domecq, which has controlled the distributor for the past 30 years and last year took full ownership of the business by acquiring Diageo’s 49.6% holding.

Although Cantrell & Cochrane is a strong business that has enjoyed 20 years of unbroken growth in sales and profits, it no longer fit with Allied’s exclusive focus on major international brands. Allied, therefore, secured Goldman Sachs & Co. to seek a buyer for the company.

BC Partners paid Allied a cash consideration of euro 734 million for Cantrell & Cochrane, which achieved 1998 sales of euro 496 million.

The euro-denominated deal, involved two tranches of equity, which together comprised some 35% of the total funding, provided by BC Partners and a small number of investors from its current private equity fund.

Cantrell & Cochrane’s existing management team, led by chief executive Tony O’Brien, also will take a stake in the business alongside the other investors.

Donaldson Lufkin & Jenrette and AIB provided senior debt and Intermediate Capital Group supplied a mezzanine loan that accounted for approximately 15% of the financing package.

The company enjoys a strong position in the Irish market, ranking as the leading supplier of both alcoholic and soft drinks to the licensed and retail trades.

The company’s principal brands include Bulmers cider, Ballygowan water, the Club range of soft drinks and mixers, Tullamore Dew Irish Whiskey, Carolans Irish Cream, Frangelico liqueur and the Aperol aperitif. Cantrell & Cochrane also distributes the Pepsi, Schweppes and 7-up Brands in Ireland, as well as spirits and wines from Allied Domecq and other major drinks producers. Following the buyout, Allied Domecq will continue to distribute Cantrell & Cochrane’s products internationally.

Under its current management team, Cantrell & Cochrane made two highly successful acquisitions in Italy. Its new independent status leaves Cantrell & Cochrane free to pursue further acquisitions that would not have been possible while it remained in Allied/Diageo ownership.