Diageo to acquire Ypióca the leading premium Cachaça brand in Brazil

Diageo reached agreement with Ypióca Agroindustrial S.A. to acquire the leading premium cachaça brand, Ypióca, and certain production assets.

The consideration is BRL 900 million (approximately £300 million) in cash and the transaction is expected to complete in a month.

The acquisition is expected to be EPS neutral in year 1 and Economic Profit positive in year 5 using a 12% WACC rate. It expands Diageo’s presence in Brazil and enhances access to the growing number of middle class consumers who are driving the growth of premium brands.

The acquired Ypióca brand has net sales of BRL 177 million (approximately £60 million) based on the pro forma adjusted figures as of December 2011.Cachaça is the largest spirits category in Brazil and Ypióca is the leader in the growing premium cachaça segment.

It is the number 2 by value and the number 3 by volume in the overall cachaça category. In addition, Ypióca has an extensive sales and distribution network in the Northeast of Brazil and the second largest retail penetration nationwide.IntraLinks (NYSE: IL) empowers global companies to share content and collaborate with businesses partners without losing control overinformation.

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