Southern Comfort and Tuaca Get a New Owner
Brown-Forman Corp. (NYSE: BF-A) has just announced that it has reached an agreement to sell its Southern Comfort and Tuaca trademarks to Sazerac for the grand total of $543.5 million. The management believes that the decision to sell these brands reflects the company’s evolving portfolio strategy and a continuation of its efforts to focus resources on its highest strategic priorities.
The company has actively managed its portfolio over the past decade by developing, acquiring and divesting specific brands and categories with the aim of improving the growth and value creation prospects for its business.
Brown-Forman has marketed Southern Comfort since it acquired the brand in 1979. As for Tuaca, Brown-Forman acquired it in two transactions, completing the purchase in 2002.
The sale of these brands is expected to close by March 1, resulting in a one-time operating income gain for Brown-Forman of approximately $475 million in fiscal 2016. The transaction is subject to regulatory clearance in the United States and customary closing conditions.
Paul Varga, CEO of Brown-Forman, commented:
We’re proud of the work undertaken over the years by our employees and partners on behalf of Southern Comfort and Tuaca. Both brands played important roles in the Brown-Forman success story, and we will have fond memories of the enjoyment they brought to consumers, our partners, and to Brown-Forman.
Mark Brown, president and CEO of the Sazerac, added:
We are very excited about the opportunity to acquire such iconic brands. Brown-Forman has done an excellent job of building both brands over the years and we are looking forward to many more years of successful brand building.
Shares of Brown-Forman traded down 3% at $101.46 Thursday morning, with a 52-week trading range of $86.85 to $122.94.