George Clooney Sells His Tequila Business for $1bn

It could be part of a script for one of his movies – George Clooney is selling the tequila company he co-founded, Casamigos’ to drinks giant Diageo plc (LON:DGE) for up to an eye-catching $1bn.  

The London listed firm will pay at first $700 million, with the potential for another $300 million based on the firm’s performance in the next decade.

Casamigos was created in 2013 by founders Rande Gerber, George Clooney and Mike Meldman.

“Since inception Casamigos has received numerous awards and accolades from tequila experts, taste makers and influencers across the US,” said Diageo in a regulatory statement released after the London close.

It added that Casamigos has an authentic brand  with a smooth and accessible taste profile and growth reached 120,000 cases in 2016, primarily in the US, and a CAGR (compound annual growth rate) of 54% in the last two years. The brand is on track to reach over 170,000 cases by the end of 2017.

CNBC quoted Clooney as saying: “If you asked us four years ago if we had a billion dollar company, I don’t think we would have said yes

“This reflects Diageo’s belief in our company and our belief in Diageo. But we’re not going anywhere. We’ll still be very much a part of Casamigos. Starting with a shot tonight. Maybe two.”

The transaction, funded through cash and debt, is expected to close in the second half of calendar 2017.

Diageo expects it to be EPS (earnings per share) neutral for the first three years and accretive thereafter.

“We expect the acquisition will be economic profit positive in the fourth full fiscal year post-completion,” it added.

Story by ProactiveInvestors