The final total price for both brands was $543.5 million.
The decision to sell reflects Brown-Forman’s evolving portfolio strategy and a continuation to focus resources on the company’s highest strategic priorities, explained Brown-Forman Chief Executive Officer Paul Varga in a press release.
“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,” Varga added.
Brown-Forman has marketed Southern Comfort since acquiring the brand in 1979. The company acquired Tuaca in two transactions, completing the purchase in 2002.
“We are very excited about the opportunity to acquire such iconic brands,” said Mark Brown, President and CEO of the Sazerac Company. “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.”
The sale of these brands is expected to close by March 1, 2016, resulting in a one-time operating income gain for Brown-Forman of about $475 million for fiscal 2016.
The transaction is subject to regulatory clearance in the U.S. and customary closing conditions. It will be discussed in further detail during Brown-Forman’s March conference call following the issuance of its third quarter earnings release.
Goldman, Sachs & Co. and Gibson, Dunn & Crutcher LLP advised Brown-Forman in this transaction.
Cooley LLP provided legal advice to Sazerac. Wells Fargo Securities provided Sazerac financial advice and led the committed financing for the transaction.