Ceepackaging

Investment

CEDC to buy Russian brand

The LOI is subject to execution of a definitive acquisition agreement, which would be subject to customary closing conditions, including CEDC board approval. The acquisition is expected to close within the next 6 months and will be financed through a combination of cash, debt and equity.
William Carey, President and CEO, commented: “This is an excellent opportunity for CEDC to take its first step in the largest vodka market in the world, Russia. The Russian spirits market continues to experience a premiumization effect, backed by the strong growth of the local economy, in which the consumer continues to trade up to premium brands. The Parliament brand has continued to outperform the market with an expected 2007 volume growth of over 25% with expected sales of 2.6 million 9 liter cases.
William Carey continued, “The company has national sales reach with over 200 salesmen who cover almost all regions of Russia. This strong local distribution platform gives us the opportunity to not only grow the existing business but also expand sales with new brands both local and imported. We would expect this acquisition, if completed, to be accretive to earnings on an annualized basis by $0.10 to $0.20 per fully diluted share.”
CEDC is the largest vodka producer in Poland and produces the Absolwent, Zubrowka, Bols and Soplica brands, among others. CEDC currently exports Zubrowka to many markets around the world. CEDC also produces and distributes Royal Vodka, the number one selling vodka in Hungary.
CEDC also is the leading distributor and the leading importer of alcoholic beverages in Poland and Hungary. In Poland, CEDC operates 16 distribution centers and 76 satellite branches and imports many of the world’s leading brands, including brands such as Remy Martin, Jagermeister, Metaxa, Jim Beam, Sauza Tequila, Grant’s, E&J Gallo, Sutter Home, Torres, Penfolds and Concha y Toro wines, Corona, Foster’s, and Guinness Stout beers and Evian.