French distiller Pernod Ricard SA has agreed to acquire all the outstanding common stock of New York-based liquor maker Castle Brands Inc. for $1.27 per share, or approximately $223 million.
The purchase price represents a 92% premium to Castle Brands' closing share price on Aug. 27 and a 109% premium to the 30-day volume-weighted average share price through such date, according to the joint announcement.
Under the deal, Pernod Ricard will acquire 100% of Castle Brands' outstanding shares, plus the assumption of debt, through a cash tender offer. The closing of this tender offer will be subject to certain conditions including the tender of shares representing at least a majority of Castle Brands' outstanding stock, early termination or expiration of the waiting period, among other customary terms.
When the tender offer is completed, Pernod Ricard will purchase the remaining shares not acquired in the tender offer through a second-step merger in which holders of Castle Brands shares not tendered in the offer will receive the same per-share price paid in the tender offer, in cash.
The transaction is expected to close in the fourth quarter of 2019.
BofA Merrill Lynch acted as financial adviser to Pernod Ricard, while Debevoise & Plimpton LLP acted as its legal adviser. Perella Weinberg Partners and Houlihan Lokey acted as financial advisers to Castle Brands, while Holland & Knight LLP acted as its legal adviser. Sullivan & Cromwell LLP acted as legal adviser to Castle Brands' financial advisers.
