BC Partners Wins Cantrell & Cochrane

This 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 deal.

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’ unbroken growth in sales and profits, it no longer suited Allied’s exclusive focus on major international brands, and Allied mandated Goldman Sachs to seek a buyer for the business.

BC Partners paid Allied a cash consideration of euro 734 million for Cantrell and Cochrane, which achieved 1998 sales of euro 496 million. The deal, which was euro-denominated, involved two tranches of equity, which together comprised some 35% of the total funding, provided by BC Partners and a small number of investors in its current fund. Cantrell & Cochrane’s existing management team, led by chief executive Tony O’Brien, will take a stake in the business. BC Partners holds an outright majority stake on its own account.

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

John Burgess of BC Partners described Cantrell & Cochrane as “the kind of business we like very much”, adding that the firm enjoys a very strong position in the Irish market, ranking as the leading supplier of both alcoholic and soft drinks to the licensed and retail trades. The group’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 and John Burgess reported that the group’s management are keen to capitalise on such opportunities: as well as continuing to foster organic growth.

The new owners aim to grow the business with a view to flotation in due course.