Italian Spirits Group Campari Raises €1.2 Billion for Courvoisier Acquisition

With its expanded portfolio and improved financial position, Campari is poised for future growth and continued success in the dynamic spirits industry.

Thursday, January 11, 2024 9:20 AM UTC

Italian spirits company Campari announced on Wednesday that it has successfully raised €1.2 billion ($1.3 billion) for its recent acquisition of French cognac house Courvoisier. The funds were obtained by issuing new shares and convertible debt, taking advantage of the favorable market conditions that characterized the year's start.

Reuters noted that the acquisition of Courvoisier, worth 1.2 billion euros, marks Campari's largest deal to date, adding to its growing portfolio, which already includes prestigious brands such as Grand Marnier and Wilderness Trail Bourbon and Rye Whiskey, acquired in 2016 and 2022, respectively.

Campari Secures Necessary Funds for Acquisition

Campari sold new shares for €9.33 each to finance the acquisition, allowing investors to take advantage of a 6% discount from Tuesday's closing price. The company's accelerated bookbuilding procedure facilitated the gathering of orders for the new shares, as per MSN.

However, Campari initially experienced a setback, with shares falling more than 5% in early trading, making them the worst-performing stock on the pan-European STOXX 600 index in percentage terms. Nevertheless, the company aimed to reassure investors by privately placing senior debt that it can choose to repay by issuing shares when it expires in January 2029.

Strengthening Campari's Capital Structure

The conversion price for the €550 million bond was set at €12.3623 per share, representing a premium of 32.5% compared to the price at which the new shares were issued. Each debt note converts into 8.09 shares. Notably, some investors hedged their risks by short-selling other Campari shares.

The funds raised from the offerings will finance Courvoisier's acquisition and general corporate purposes. Furthermore, Campari plans to improve its capital structure by reducing debt and extending average maturity, ensuring long-term stability and growth.

In terms of capital allocation, the new shares account for 5.6% of Campari's capital, while the convertible bond, if converted, would account for an additional 3.6% of capital.

Campari's recent fund-raising operations were managed by BofA Securities, Goldman Sachs, Crédit Agricole CIB, Intesa Sanpaolo, and Mediobanca, showcasing the company's efforts to work with prestigious financial partners.

Photo: PR Newswire