Tia Maria sale process kicks off

This article is provided to FT.com readers by mergermarket—a news service focused on providing actionable, origination intelligence to M&A professionals. www.mergermarket.com
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The sale of Tia Maria, the coffee liquor brand, has begun, with investment memoranda now being circulated to potential buyers, sources claiming knowledge of the situation told mergermarket.

Deutsche Bank and Rabobank were said to be advising the vendors, listed French spirits giant Pernod Ricard. Pernod did not return a request for comment.

According to press reports last autumn, Pernod had earmarked bourbon brand Wild Turkey, as well as Tia Maria, for disposal as part of a EUR 1bn divestment plan to decrease the company’s financial leverage in the wake of its acquisition of Vin&Sprit.

Sources this week estimated the Tia Maria brand would fetch in the region of EUR 200m-EUR 250m, with first-round bids expected by the end of the month. Potential buyers could include C&C, Illva Saronno, Fortune Brands and Suntory, several bankers suggested.

Illva, one banker noted, may not be a leading candidate in the auction due to the size of the transaction. A US-based industry banker was skeptical of C&C’s ability to buy Tia Maria because the company is facing with a relatively high debt load. For the year ending 28 February, C&C reported it had reduced its net debt by EUR 30m, to EUR 226.2m, or 1.9x FY2009 EBITDA.

Last month, Pernod announced it had sold Wild Turkey to Italy’s Campari for USD 575m. At the time, Campari CEO Bob Kunze-Concewitz said the company was not interested in further acquisitions after the deal, including a purchase of Tia Maria.

Pernod bought a 45% stake in Tia Maria from Canada’s Corby Distilleries in 2006 for USD 92m.

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