Distell purchases BGB to reach African markets

Distell purchases BGB to reach African marketsDistell entered into a two-phased transaction of purchasing Best Global Brands (BGB), which the company described as a strategic priority to lead in selected African countries.

Phase one of the deal saw Distell purchasing 26% of BGB for an upfront consideration to secure the asset and lessening the risk of the deal, considering challenges faced with Angola economic environment.

The second phase will see the remaining 74% being purchased once certain operational hurdles are met.

Distell says, the Nigerian operations and the Kenya export business will be incorporated in BGB during the next six months once the restructuring of the Nigerian operations is complete subject to obtaining approval from the Nigerian competition authorities and BGB obtains approval from the Kenyan competition authorities to acquire the Kenya export business.

Distell claims that BGB leads the mainstream spirits category in Angola, with growing presence in Nigeria, Kenya and Zambia.

According to a statement by Distell, BGB owns, manufactures and distributes the fast growing mainstream “Best” spirit brand in countries throughout Africa, and recorded sales volumes in excess of 30 million litres over the last twelve months.

Distell CEO Richard Rushton said, “the acquisition of BGB is an attractive opportunity that will transform Distell’s African platform. We look forward to partnering over the next few years with the entrepreneurs that built BGB into a pan-African, highly cash generative business and building on their successes. We see exciting upside for the future.”

The transaction gives Distell access to a strong pan-African brand supported by an established trading platform with high quality local production facilities in Angola and Nigeria as well as a solid presence in Kenya and Zambia.

BGB is highly cash generative and offers excellent synergies with Distell in procurement, route-to-market and production. In particular, the acquisition gives Distell downstream benefits in whisky, alcohol and cream liqueur supply.

The purchasing group sees the hurdles as assurance measures for 100% purchase of BGB in good shape.