George Clooney's $1bn Tequila goldmine: How did Casamigos begin?
- Author: Salvatore Jensen Jun 23, 2017,
Jun 23, 2017, 7:53
British drinks giant Diageo (DEO, DGE.L) has agreed to buy George Clooney's Casamigos premium tequila brand, for as much as $1 billion as it seeks to expand into the market of the traditional Mexican spirit.
Casamigos, which means "house of friends", was founded in 2013 by Clooney and his friends - nightlife entrepreneur Rande Gerber, who is married to model Cindy Crawford, and real estate developer Mike Meldman.
Diageo said it will pay $700 million for Casamigos at first, and then pay another $300 million over 10 years if the brand reaches certain performance milestones. He jokingly said, "We'll still be very much a part of Casamigos, starting with a shot tonight".
The transaction is expected to close during the second half of 2017.
Since inception in 2013 Casamigos has received numerous awards and accolades from tequila experts, taste makers and influencers across the U.S., helping it deliver impressive growth, reaching 120,000 cases in 2016, primarily in the USA, and a CAGR of 54 percent in the last two years. In addition, it adds that it will pay for the brand with a mixture of "existing cash resources" and new debt (borrowings).
George Clooney (right) with friends in the Casamigos Agave Fields.
The brand retails for about $50 per bottle, roughly the same as Diageo's Don Julio tequila.
George and Rande will stay involved with the brand after the acquisition, which is set to take place later this year.
"We are extremely excited to team up with one of the largest, most respected spirits companies in the world", said Gerber.
The tequila is made by an undisclosed partner in Mexico.
"Key element is the continued healthy growth of tequila, especially in the United States, driven by high end tequilas such as Casamigos", Cunnington said.