Pitch Best Mid Cap Deal 2023: Nolet Distillery acquires Lucas Bols Company

Stem op deze deal via de stempagina: Mena.nl/genomineerden-best-mid-cap-deal-2023

Name of the deal: The recommended all-cash offer by Nolet Distillery for Lucas Bols Company
Date announced: 9 October 2023
Date closed: End of Q1 2024
Published value: € 269.5 million for 100% of the outstanding shared, of which Nolet already owned c.30%, so that the remaining shares represent a value of approx. € 190 million
Buyer(s): Nolet Distillery
Target(s): Lucas Bols Company
Seller: N/a, target company is listed

Involved firms and advisors

Involved firms and advisors buy side:
M&A: AXECO
Legal: De Brauw Blackstone Westbroek
Financial DD: Deloitte
Tax DD: Loyens & Loeff

Involved firms and advisors target: -
M&A: ABN AMRO
Legal: Loyens & Loeff

Involved firms and advisors sell side: -
n/a

Pitch

Brief description deal / Deal outline
In October 2023, Nolet Distillery and Lucas Bols Company reached agreement on a recommended public offer for all of the issued and outstanding ordinary shares in the capital of Lucas Bols Company, for a total consideration of approx. EUR 269.5 million. The Lucas Bols Company is a leading global cocktail and spirits player in the worldwide cocktail market and one of the oldest Dutch companies still active. Lucas Bols’ mission is to create great cocktail experiences around the globe.

With its offer Nolet creates the opportunity for Nolet and Lucas Bols to jointly enter into a new chapter of the rich history of these two successful Dutch distillers. Together they will become the Dutch champion in the global spirits and cocktails market, strengthening their heritage for the long term.

By becoming a part of the Nolet Group, Lucas Bols secures the preservation of almost four and a half centuries of its craftsmanship and heritage in the long run. With Nolet as a shareholder, Lucas Bols gains a partner who, owing to its own history and family values, comprehends the essential elements required for the continuous fortification of spirits and cocktail brands for generations to come. Serving as a committed, well-funded, and long-term strategic ally, the Nolet Group establishes a robust foundation for The Lucas Bols Company, enabling an expedited growth strategy.

From Nolet’s perspective, joining forces with Lucas Bols represents a valuable expansion into a portfolio boasting renowned brands, aligning seamlessly with the long-term vision of the Nolet family company. With the offer Nolet can strengthen their position in the market and subsequently protect the Nolet heritage for the many years to come.

Why should this deal win the Award for Best Deal Mid-Cap?
Preserving Dutch Distillery and Spirit heritage: Nolet and The Lucas Bols Company see this as a unique opportunity to bring together two leading Dutch companies with a rich heritage and a wide range of strong spirits and cocktail brands. By becoming part of the Nolet Group, almost four and a half centuries of Lucas Bols’ craftsmanship and heritage will be preserved for the long term. With Nolet, Lucas Bols will have a shareholder who, through its own history and family culture, understands what is needed to continuously strengthen spirits and cocktail brands for generations to come.The shareholders: For the shareholders of Lucas Bols, the Consideration offers a substantial premium. It stands at 76% above Lucas Bols’s closing share price on October 6, 2023 and providing a 73% premium over the three-month volume-weighted average closing share price leading up to this announcement. This represents an immediate, and assured value to Lucas Bols’s shareholders. Despite the share price experiencing periods of stagnation and some decline in recent years, this premium remains substantial.For the Company and its employees: The Lucas Bols Company will retain its identity, name and brands. It will be brought into the NoletGroup as a separate company under the continued leadership of Lucas Bols’s current CEO Huub van Doorne and CFO Frank Cocx, operating from its existing locations in Amsterdam. Overall, employees will feel limited impact. The company, however, can focus on their long-term strategy without the demands of short-term financial investors.

Deal rationale:
Nolet and Lucas Bols complement each other well in terms of markets, brands, innovation, and marketing, which will enable further international growth. Nolet is the inventor of well-known spirits brands as Ketel One Vodka, KETEL 1 Jenever, NOLET’S Gin, while The Lucas Bols Company markets Bols (The World’s First Cocktail Brand), Passoã, Galliano and Tequila Partida, amongst others, as successful brands. As part of the century old Nolet Group, Lucas Bols’ heritage, craftsmanship and close ties to the city of Amsterdam will be preserved for the very long term. Lucas Bols will have a shareholder who, through its own history and family culture, understands what is needed to continuously strengthen brands for generations to come. This by further investing in brands, innovation and growth. As a long-term, committed and financially strong strategic partner, the Nolet Group can provide Lucas Bols an opportunity to accelerate its growth strategy. Nolet has the focus, strength and resources to make this possible for The Lucas Bols Company. Nolet can accelerate Lucas Bols’ strategic vision post the Offer. Furthermore, in today’s unpredictable markets, marked by constant changes, this deal secures contingencies for Lucas Bols to weather future challenges.

What is the impact of this deal for the company?
The Lucas Bols Company will retain its identity, name and brands. It will be brought into the Nolet Group as a separate company under the continued leadership of Lucas Bols’ current CEO Huub van Doorne and CFO Frank Cocx, operating from its existing locations in Amsterdam. Overall, the company and its employees will feel limited impact.Management can focus on their long-term strategy without getting distracted by market ups and downs. They can also have direct discussions with the Nolet family, who have a very good understanding the market and the business, which helps for building lasting value for the future.

What is the impact of this deal for the direct stakeholders?
For the shareholders of Lucas Bols, the Consideration offers a substantial premium. It stands at 76% above Lucas Bols’ closing share price on October 6, 2023 and providing a 73% premium over the three-month volume-weighted average closing share price leading up to this announcement. This represents an immediate, alluring, and assured value to Lucas Bols’ shareholders. Despite the share price experiencing periods of stagnation and some decline in recent years, this premium remains substantial.With the deal guaranteeing continuity in the foreseeable future and the preservation of Lucas Bols’ identity, the employees are expected to be minimally affected. Nevertheless, there will be a shift for management as a result of the delisting, with the market fluctuations no longer affecting future strategic decisions. Furthermore, management will have the opportunity for direct interaction and discussions with the Nolet family, who possess a deep understanding of the business and the market resulting long-term value creation.Dealers, suppliers, and other business partners will experience minimal immediate impact on their day-to-day operations due to the deal. However, in the long run, these stakeholders stand to gain from the brand’s accelerated growth, along with potential opportunities for cross-selling.

What is the impact of this deal on society?
The preservation of Dutch distillery and spirit heritage is a shared goal of both Nolet and The Lucas Bols Company, who view this as a distinctive chance to unite two prominent Dutch firms boasting extensive legacies and a diverse array of robust spirits and cocktail brands.

Both brands, with a history spanning over 400 years, have had a significant impact on the liquor and spirits culture, especially in Dutch society. Preserving this heritage for the future is crucial. While alcohol consumption has changed over the years, the Lucas Bols deal can help ensure the continued legacy of both brands in an evolving world.

What was most complex about this deal?
Any public to private is complex by nature. In this particular case difficulties arise from the need and wish to protect Dutch heritage. This situation required a delicate balance between control after the transaction by the acquiring side and the preservation of the Lucas Bols heritage and identity by the selling side. Given that both parties share a long tradition in the Netherlands, Nolet could understand the requirements of Lucas Bols, and vice versa, fostering a mutual understanding.

To achieve the best result for both parties, detailed non-financial agreements were agreed for the long- and short term.