Eastside Distilling acquires Azuñia Tequila
Eastside Distilling Inc., Portland, Ore., announced it has acquired Azuñia Tequila from Intersect Beverage, Newport Beach, Calif. The acquisition brings product and operational assets to Eastside including more than 2,600 on-premise points of distribution, a direct sales team and a product line well positioned in the growing above premium and luxury tequila segments, the company says.
The Azuñia tequila brand provides Eastside Distilling with a second national anchor brand, along with Eastside’s Redneck Riviera Whiskey portfolio. The above premium and luxury tequila segments are some of the fastest growing subsets at greater than 10 percent annually (based on Nielsen case data) with approximately $550 million in U.S. sales on 2.4 million cases sold, it explains.
Azuñia Tequila offers four premium tequila products: Blanco Organic Tequila, Reposado Organic Tequila, Añejo Tequila and Azuñia Black Tequila. Primarily sold on-premise throughout the Western and Southeastern United States, Azuñia reported gross 12-month sales of $3.5 million (through June 30, 2019), an increase of 37 percent compared with the prior-year period, on approximately 13,000 cases sold.
Handcrafted using 100 percent pure weber blue agave grown in the heart of the Tequila Valley, Azuñia tequila is then roasted in traditional clay hornos. All of Azuñia’s tequilas undergo natural, open-air fermentation and bottling onsite to ensure consistency and field-to-bottle quality. Double-distilled, Azuñia tequilas are extracted at 46 percent alcohol by volume.
In a statement, Eastside Distilling President Robert Manfredonia commented: “The acquisition of the Azuñia portfolio of tequila perfectly aligns with our go forward objectives to leverage and drive our national platform strategy, which we believe will significantly expand shareholder value. … The team at Azuñia has created strong on-premise adoption of the brand, which, when combined with Eastside’s off-premise expertise, is expected to benefit not only the Azuñia portfolio, but our other existing brands.”
The acquisition of Azuñia from Intersect Beverages is structured as an all-stock transaction, provided that Eastside can at its election pay a portion of the consideration in cash or a three-year promissory note if the issuance of stock would require Eastside to hold a vote of its stockholders under the applicable Nasdaq rules.
The stock-based transaction is to be valued based on future performance of the Azuñia brand. Eastside expects a positive impact on its adjusted EBITDA from the Azuñia operations in 2020. BI