Brwon-Foreman agrees to sell two brands for $543.5 million.
The iconic Southern Comfort brand of alcohol is about to get a new owner, according to the Lexington Herald Leader.
Current owner of the brand, Brown-Foreman, based in Louisville, announced the sale to New Orleans-based Sazerac for a combined $543.5 million Thursday. Included in the sale was the Tuaca liqueur brand as well.
Brown-Foreman, makers of Jack Daniel’s and premium whiskeys like Woodford Reserve, purchased the Southern Comfort label in 1979 and acquired Tuaca, a brandy-based liqueur with a vanilla and orange flavor, in 2002.
Paul Varga, CEO of Brown-Foreman, said in a news release the company wanted to focus its resources on its highest strategic priorities. “We’re proud of the work undertaken over the years by our employees and partners on behalf of Southern Comfort and Tuaca,” said Varga. “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.”
The release continues, “Brown-Forman has actively managed its portfolio over the last decade by developing, acquiring and divesting specific brands and categories with the aim of improving the growth and value creation prospects for its business.” The sale is expected to close by March 1, 2016 and will result in a one-time operating income gain of approximately $475 million for the fiscal year 2016.
The company has struggled in recent years as the popularity of the Southern Comfort brand has faltered, and had been using advertising campaigns to boost the brand. The company reported that sales of the brand had fallen seven percent in net sales, in the second-quarter earnings report this past December.
Mark Brown, president and CEO of Sazerac, said, “We are very excited about the opportunity to acquire such iconic brands.”
Brown-Foreman has been in business for over 145 years and its brand list in addition to Jack Daniel’s includes Canadian Mist, Korbel and Early Times, among others.
Sazerac features Ancient Age Canadian whiskey and Dr. McGillicuddy’s liqueurs among its brand portfolio.