Press Release:
(Middlebury, VT) – The Vermont Hard Cider Company, LLC – maker of Woodchuck Hard Cider, the #1 cider brand in the United States – has conditionally agreed to combine with C&C Group – maker of cider brands in Ireland and the UK. The transaction, which is subject to competition and regulatory approvals, will allow the company to fully harness and maximize the growth of its US cider business.
Vermont Hard Cider Company, LLC will operate on a standalone basis as a wholly-owned subsidiary of C&C. Bret Williams will remain the President and CEO of the Vermont Hard Cider Company. The Woodchuck Brand will remain firmly rooted in Vermont, utilizing its current workforce. C&C Group has committed to move forward with the planned cidery construction here in Middlebury.
The US cider category is experiencing tremendous growth. As a category, sales are up almost 60% over last year. Woodchuck Hard Cider’s growth continues at 25% a year. With this swift growth comes the need for a deeper investment. One that will make certain Woodchuck remains the leader of the category it reinvented from a rural Vermont garage in 1991.
In C&C Group we find a like minded partner.
C&C Group is a cider company. They have been making cider in the UK and Ireland since 1935. They are committed to using the finest ingredients, supporting local agriculture, and working to reduce their environmental footprint. They will invest in the expansion and future of the Vermont Hard Cider Company, providing a solid base for the overall US portfolio. The expansion will enable C&C to participate further in the expected growth of the US cider category and will offer the potential for more jobs in our local community.
“We recognize what Vermont Hard Cider has done to support and grow the cider industry in the United States. The cider category wouldn’t exist today, if not for the hard work they have put in over the last two decades.” said Stephen Glancey, C&C CEO. “Their ability to innovate rare and limited batch ciders serves to push the category forward in the years to come. It is an exciting time to be in the cider business and we are excited to be leading the way.”
“C&C recognizes that in order to maintain Woodchuck’s current success, its core values must remain intact. The brand and company will remain rooted in Vermont, utilizing its current workforce, and the quality of the liquid will not be compromised.” said Bret Williams, VTHCC President and CEO. “It is our belief that significant opportunities for growth of the cider category are possible by combining these iconic cider brands.”
There is some false information circulating as the result of an error in a Reuters write-up. The price tag is $305 million DOLLARS… not Euros.
Dollars, Euros… doesn’t matter. It’s still a huge valuation, probably 30x earnings at least. Something seems odd about this to me. $305 million dollars for a company doing $70 mil in sales, growing 25% a year? Google is growing 25% annually, probably has a much higher net profit margin, and has a lower valuation than this. C&C are waaaayyyy overpaying.
Operating profit is $15 mil/year so I think that’s 20x or do they go by after-tax profit?
P/E ratios are after tax, but you’re right, I hadn’t seen all the numbers on the C&C release. It’s not 30x; $15 mil EBITDA is maybe $12 mil after tax, so perhaps closer to 25x. That still strikes me as a rich valuation. But the cider market is growing quickly in the US, and Woodchuck is the undisputed leader.
Kind of like how Alex Rodriguez and Albert Pujols could command $30 mil/year contracts because they were #1 in their time. Whereas #2 players may have got a $20 mil contract.