Luxco, which generated net revenues of around $202m last year, provides a portfolio of brands including Ezra Brooks Bourbon Whiskey, Daviess County Straight Bourbon Whiskey, Yellowstone Bourbon Whiskey, El Mayor Tequila and Everclear in the US.
Headquartered in Kansas, MGP Ingredients produces spirits such as bourbon, rye whiskeys, gins and vodkas, as well as proteins and starches for food products, and industrial alcohol for food and non-food applications.
It says the deal, which values Luxco at $475m, will immediately increase its scale and market position in the branded-spirits sector and strengthen its platform for future growth of higher value-added products.
David Colo, president and CEO of MGP Ingredients, Inc., said: “Luxco presents a unique opportunity to take a material step towards realizing our long-term strategy. It significantly expands our product line in the higher-value branded-spirits sector and increases our sales and distribution capabilities across all 50 states.
“We have enormous respect for the platform Luxco has built, and we’re excited to add its portfolio of fast-growing premium distilled spirits brands together with strong, cash-flow generating legacy brands.”
Under the terms of the agreement, Luxco shareholders will receive aggregate cash consideration of $238m, subject to customary adjustments for working capital, net indebtedness and transaction expenses. They will also receive 5 million shares of MGP common stock, valued at approximately $238m. Luxco shareholders will have the right to nominate up to two of the Company’s nine Board directors, with Luxco chairman and CEO Donn Lux being designated as their first director following the closing of the transaction.