Cider-maker C&C expands with takeover of second biggest brand in US
CIDER-maker C&C has ramped up its expansion into the US with the takeover of the second biggest cider brand in the country.
The Irish company said it will pay E&J Gallo Winery up to €20m for Hornsby's cider, which is focused mainly on the off-trade on the west coast. It had sales of around €12m last year and is growing at 5pc annually.
Under the terms of the deal, C&C will have an initial outlay of €16.4m with the remaining €3.6m due, assuming the brand hits performance targets in the next six months.
Although the cider market in the US is very small -- about 0.2pc of the long alcoholic drinks market -- it is growing at close to 25pc annually.
C&C's chief executive designate Stephen Glancey was pleased with the deal.
"The transaction more than doubles our volume in a growing market; broadens the scope of our cider portfolio; and, presents significant opportunity to develop the Hornsby's brand throughout North America," he said.
"This acquisition gives us 20pc of the US market which is a very important market to us and the largest in the world.
"It will also compliment our Magners business in the US which is focused on the pub trade in most of the north-east coastal cities, which contrasts nicely with Hornsby's profile."
In what could be a benefit to Irish farmers, Mr Glancey added that the company would look at using Irish apples to supply Hornsby's. Previously, the brand had sourced apples from a number of different suppliers around the world.
Mr Glancey said the transaction would likely not be the last deal C&C does.
"We've done a few now in recent years with this, Tennents, and the sale of the spirits business so we'll always keep an eye for the right deal," he said.
C&C closed up 3.4pc at €3.03.