Lion Capital Picks Up Russia's Biggest Vodka Maker
Buyout fund Lion Capital has followed its August 2007 USD 500 million purchase of Russian juice drinks company Nidan Soki with the acquisition of a majority stake in the Russian Alcohol Group, the country's largest producer of vodka and ready-to-drink (RTD) alcoholic beverages. Russian Alcohol's Green Mark vodka is the largest brand by volume in Russia and one of the top 5 global brands.
Russian Alcohol's other brands include premium vodka Zhuravli. 2008 sales have been projected at ca. USD 500 million, with five production plants, 3,500 employees and a well-developed distribution network. Participating in the deal with Lion Capital were Goldman Sachs and Central European Distribution Corporation (CEDC), the Polish multi-brand vodka maker which also operates an extensive import/export distribution network in Poland and Russia, and Goldman Sachs. CEDC put up USD 156.5 million and arranged debt financing for thhe USD 600 million deal.
The acquisition forms part of growing transnational penetration (including private equity) of the regional beverages market. In April, Coca-Cola Hellenic purchased Russia's drink-maker Aquavision, whose brands also include Botaniq juice. PepsiCo last year paid USD 542 million for Ukraine's fruit juice company Sandora.
Lion Capital bought out the UK cereal maker Weetabix for GBP 640 million in November 2003, picked up Orangina (together with Blackstone), the former European beverages division of Cadbury Schweppes, in February, 2006 and in August of that year bought Kettle Foods, the market leader in both the US and the UK for organic potato chips. Last year, Lion Capital defeated a T&G organizing effort at Kettle Chips by employing the notorious US union-busters Burke Group.