Eastside Distilling acquires Azuñia Tequila for US$14.7m to expand offfering

USA – Oregon based spirits company, Eastside Distilling has acquired Azuñia Tequila from Intersect Beverage for approximately US$14.7m in deal that will expand its product portfolio.

Azuñia Tequila offers four premium tequila products; Blanco Organic Tequila, Reposado Organic Tequila, Añejo Tequila, and Azuñia Black Tequila handcrafted using 100% pure Weber Blue agave grown in Tequila Valley.

This acquisition brings substantial product and operational assets to Eastside including over 2,600 on-premise points of distribution, a direct sales team, and a product line well positioned in the rapidly growing above premium and luxury tequila categories. 

The Azuñia tequila brand provides Eastside Distilling with a second national anchor brand, along with Eastside’s Redneck Riviera Whiskey portfolio.

The above premium and luxury tequila categories, according to a Nielsen Study, are some of the fastest growing subsets at greater than 10% annually with approximately $550 million in U.S. sales on 2.4 million cases sold.

The Azuñia tequila brands are all primarily sold throughout the western and southeastern US.

President of Eastside Distilling, Robert Manfredonia said: “The acquisition of the Azuñia portfolio of tequila perfectly aligns with our go forward objectives to leverage and drive our national platform strategy which we believe will significantly expand shareholder value.

“The above-premium and luxury tequila categories are some of the fastest growing sub-segments of the spirits industry, and categories in which our regional and national distribution partners, as well as tier-one national accounts are actively seeking products.

“The team at Azuñia has created strong on-premise adoption of the brand, which, when combined with Eastside’s off-premise expertise is expected to benefit not only the Azuñia portfolio, but our other existing brands. We look forward to presenting Azuñia to key retail accounts beginning immediately.”

Azuñia Tequila was previously owned by Intersect Beverage, in which Stephanie and Pat Kilkenny were majority stakeholders.

As part of the deal, Stephanie Kilkenny is expected to join Eastside’s board of directors, subject to customary board and committee approvals.

Under the terms of the agreement, the deal is structured as an all-stock transaction provided that Eastside pays a portion of the consideration in cash or a three-year promissory note.

Eastside has also agreed to issue additional consideration of up to US$1.5 million upon the Azuñia business achieving revenue of at least US$9.45 million for one year period,  12 months after closing the deal.

Stephanie Kilkenny said: “As we embarked on the next stage of growth for Azuñia, we recognised that what we were looking to create was exactly what Eastside Distilling could offer to us: a fully integrated sales organisation with strong distributor relationships and an existing footprint in the country’s largest independent and national retailers.

“Further, the cultural fit aligns perfectly with that of the Azuñia team which takes tremendous pride and passion in the products that we produce for our customers.

“I look forward to working with the team to accelerate the growth in Azuñia and the entire Eastside portfolio of products.”

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