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Tasmanian whisky maker Lark acquires Shene Estate for AUS$40m
Tasmanian whisky company Lark Distilling has acquired the Kernke Family Shene Estate in a deal worth £21.5m (AUS$40m).
The Shene Estate is the owner of the Pontville Distillery and reportedly the deal includes 40 acres of land and buildings, a 130,000 litre distillery, a cellar door, eight bond stores, a working cooperage and the historic stables and homestead.
According to Stockhead, Lark will pay £20.7m (AUS$38.5m) in cash, with the remaining £808k (AUS$1.5m)to be paid in Lark’s shares.
The company is undertaking a capital raising of around £28.5m (AUS$53m) to fund the deal, with £25m (AUS$46.5m) being underwritten by Barrenjoey.
The acquisition of Pontville will become Lark’s third working distillery in Tasmania, alongside its Cambridge and Bothwell sites, and will contribute to the in-house production from 193,000 litres to 576,000 litres of Lark whisky each year.
The estate will also reportedly give Lark an additional stock of 483,000 litres of whisky under maturation, worth £13m (AUS$24m).
That will take Lark’s total litres under maturation to more than 2 million litres by June 2022, valued at £234m (AUS$435m).
Lark CEO Geoff Bainbridge said: “We’re effectively buying the liquids at £26 (AUS$49) a litre, and we’re selling them at £116 (AUS$216) a litre.”
“If you think just about the headline before understanding the intricacies, you’d think £28.5m (AUS$53m) is large but it’s super accretive to shareholders,” Bainbridge added.
Bainbridge revealed via Stockhead that Lark has rapid momentum with sales doubling two years in a row and Pontville is also expected to provide Lark with early access to the export market beginning in FY23.
“If we were to capitalise on that demand momentum organically, we would have to wait five to eight years. This acquisition means that we’re picking up liquids that are available and ready to go, so it gives us the opportunity to capitalise on our brand momentum rather than have to wait for an extended period of time,” said Bainbridge.
Part of the £28.5m (AUS$53m) capital raising will be used construct a new 1 million litre greenfield distillery on the Pontville site.
The construction, expected to cost £7m (AUS$13m), will commence in early 2022 and will reportedly deliver Lark a “world-class” distillery in 2023.