MGP Ingredients, Inc. announced that its Luxco, Inc. subsidiary had reached a definitive agreement to acquire 100% of the equity of Penelope Bourbon LLC and its related assets. Founded in 2018, Penelope Bourbon is a family and founder-owned and operated American Whiskey company with a diverse portfolio of high-quality whiskeys in the premium-plus price tiers.
The acquisition includes all intellectual property and inventory of bottled products, as well as Penelope’s aging whiskey inventory on a debt-and-cash-free basis. The upfront consideration is $105.0 million in cash to be paid at closing, with further potential earn-out contingent consideration of up to a maximum cash payout of $110.8 million measured through December 31, 2025, if certain performance conditions are met, reflecting the brand’s current growth potential. The acquisition is expected to be financed using MGP’s existing revolving credit facility and cash on hand.
Transaction Highlights
- Enhances presence in the growing American Whiskey category
- Expands portfolio of premium-plus price point brands
- Leverages Branded Spirits’ national distribution platform to extend Penelope’s reach
- Current MGP Distilling Solutions customer
- Expected to be immediately accretive to Branded Spirits segment gross margin and consolidated adjusted basic earnings per share after close
- Anticipated total cost synergies of approximately $5 million by December 31, 2025
- The transaction is anticipated to close in June 2023
“We are excited to welcome Penelope as part of our expanding premium-plus brand portfolio,” said David Colo, president and CEO of MGP Ingredients. “This acquisition aligns well with our premiumization strategy and focus on growing high potential, high margin brands. Penelope is an excellent addition to our Branded Spirits portfolio as we look to expand its availability throughout our national distribution platform. We are enthusiastic about this acquisition and its ability to further our participation in the growing American Whiskey category while delivering meaningful long-term growth.”
“MGP has been an incredible partner of ours since we started our business in 2018. We are excited to take our partnership to the next level to accelerate Penelope’s growth for years to come,” said Michael Paladini, CEO & Founder of Penelope. “Since our initial product launch in 2019, watching consumers embrace our brand has been amazing. We look forward to expanding our partnership with MGP and building on our legacy,” said Daniel Polise, COO & Founder of Penelope.
