As its whiskey sourcing program shrinks, MGP Ingredients, and its subsidiary Luxco, has acquired one of the more successful brands built off of MGP sourcing: Penelope Bourbon.
Founded in 2018, Penelope Bourbon is a family-owned and -operated American Whiskey company with a portfolio of whiskeys in the premium-plus price tiers.
The acquisition includes all intellectual property and inventory of bottled product, as well as Penelope’s aging whiskey inventory on a debt-and-cash-free basis.
“We are excited to welcome Penelope as part of our expanding premium-plus brand portfolio,” says David Colo, president and CEO of MGP Ingredients. “This acquisition aligns well with our premiumization strategy and our focus on growing high-potential, high-margin brands. Penelope is an excellent addition to our Branded Spirits portfolio as we look to expand its availability throughout our national distribution platform. We are enthusiastic about this acquisition and its ability to further our participation in the growing American Whiskey category while delivering meaningful long-term growth.”
The upfront purchase price is $105 million, according to a press release from MGP. The total price can reach a maximum cash payout of $215.8 million, if certain performance conditions are met — measured through December 31 — reflecting the brand’s current growth rate.
The acquisition is expected to be financed using MGP’s existing revolving credit facility and cash on hand.
“MGP has been an incredible partner of ours since we started our business in 2018,” says Michael Paladini, CEO and Founder of Penelope. “We are excited to take our partnership to the next level with the goal of accelerating Penelope’s growth for years to come.”
“Since our initial product launch in 2019, it has been amazing to watch consumers embrace our brand,” adds Daniel Polise, COO and Founder of Penelope. “We look forward to expanding our partnership with MGP and building on our legacy.”
Reed Smith LLP acted as legal transaction advisor to MGP. TD Cowen served as exclusive financial advisor and BakerHostetler acted as legal transaction advisor to Penelope Bourbon.
This follows recent MGP news of launching their Remus Gatsby Reserve.