January 14, 2014 - The $16 billion sale of whiskey giant Beam Inc. this week yanks the alcoholic beverage sector's best big-name target off the table, bringing smaller - but still lucrative - targets into view as industry players seek to cash in on a growing global appetite for boozy drinks.
Aside from the landmark Beam sale, beverage sector deal-making has proven fertile. Over the past two years, a combined 54 distillers have traded hands in deals with a total disclosed value of more than $22.8 billion, not counting the Beam transaction, according to data compiled by Tully & Holland, Inc. The trend lines up with a broader forecast for 2014, the year dealmakers expect to draw consumers back out after the widespread economic downturn constrained spending.
Particularly in corners of the marketplace driven by consumer spending - including the beer and spirits industries - the outlook has made already strong prospects even brighter. "For a company like Suntory to pick up a portfolio of brands that includes Beam, Maker's Mark and Courvoisier and the others, it's really unique," said Tim Tully, President of Tully & Holland, Inc., who also heads up the investment bank's food and consumer group. "Suntory is judging it to be a worthwhile investment vis-a-vis the growth opportunities that the brands represent."