Brown-Forman to sell Early Times and Canadian Mist as part of the group's portfolio strategy
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Category: Brown-Forman (BF.A)
Date: 22 June 2020 Stock price of Brown-Forman: $57.90 We take a look at a press release from Brown-Forman distillery and owner of brands such as Jack Daniels and el Jimador who announced its selling some of their brands that include Canadian Mist and Early Times.
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We are the largest American-owned spirits and wine company with global reach. We primarily manufacture, bottle, import, export, market, and sell a wide variety of alcoholic beverages under recognized brands."
More about Brown-Forman
Brown-Forman Corporation (the “Company,” “Brown-Forman,” “we,” “us,” or “our” below) was incorporated under the laws of the State of Delaware in 1933, successor to a business founded in 1870 as a partnership and later incorporated under the laws of the Commonwealth of Kentucky in 1901. We primarily manufacture, bottle, import, export, market, and sell a wide variety of alcoholic beverages under recognized brands.
We employ approximately 4,700 people on six continents (excluding individuals that work on a part-time or temporary basis), including approximately 1,200 people in Louisville, Kentucky, USA, home of our world headquarters. We are the largest American-owned spirits and wine company with global reach. We primarily manufacture, bottle, import, export, market, and sell a wide variety of alcoholic beverages under recognized brands. We are a “controlled company” under New York Stock Exchange rules because the Brown family owns more than 50% of our voting stock. Taking into account ownership of shares of our non-voting stock, the Brown family also controls more than 50% of the economic ownership in BrownForman.
Quick facts about Brown-Forman
Stockholders equity per share: $2.58
A few of Brown-Forman's best known brands
We employ approximately 4,700 people on six continents (excluding individuals that work on a part-time or temporary basis), including approximately 1,200 people in Louisville, Kentucky, USA, home of our world headquarters. We are the largest American-owned spirits and wine company with global reach. We primarily manufacture, bottle, import, export, market, and sell a wide variety of alcoholic beverages under recognized brands. We are a “controlled company” under New York Stock Exchange rules because the Brown family owns more than 50% of our voting stock. Taking into account ownership of shares of our non-voting stock, the Brown family also controls more than 50% of the economic ownership in BrownForman.
Quick facts about Brown-Forman
- Brown-Forman is listed on the New York Stock Exchange under share code ticker: BF.B
- Market capital of Brown-Forman: $35.4 billion
- Number of employees of Brown-Forman: 4 700
- Net Sales of Brown-Forman 1Q 2020: $704 million
- Net sales of Brown-Forman in fiscal 2019: $2.994 billion
- Earnings per share for Brown-Forman in fiscal 2019: $1.37
- Cash on balance sheet as at end of fiscal 2019: $239 million
- Goodwill of Brown-Forman: $763 million
- Goodwill shows the estimated value of their brands names and the brands of the group.
- Shares in issue: 510 million
Stockholders equity per share: $2.58
A few of Brown-Forman's best known brands
- Jack Daniel’s Tennessee Whiskey
- el Jimador Tequilas
- Woodford Reserve Bourbon
Brown-Forman press release announcing the selling of Canadian Mist and Early Times
LOUISVILLE, Ky.--(BUSINESS WIRE)-- Brown-Forman Corporation (NYSE: BFA) (NYSE: BFB) announced today that it has reached an agreement to sell the Early Times, Canadian Mist, and Collingwood brands, and the Canadian Mist production assets, to Sazerac Company.
“Early Times and Canadian Mist have been valued brands in our portfolio for many years, and they each have played significant roles in our company’s history,” said Lawson Whiting, President and Chief Executive Officer, Brown-Forman Corporation. “We are thankful to all the people who have distilled, bottled, shipped, marketed, and distributed these brands with care over the years.”
This sale reflects the continued evolution of the company's portfolio strategy to focus on premium brands. Brown-Forman has actively managed the shape and contents of its portfolio over the last decade and a half through developing, acquiring, and divesting various businesses and brands. The company believes this portfolio management, alongside innovation, will allow it to continue to focus on the best growth prospects and value creation over the long term.
Early Times, which is celebrating its 160th anniversary this year, was the first brand Brown-Forman purchased in 1923. Canadian Mist joined its portfolio in 1971 and was the company’s first production operations outside of the United States.
“We are delighted to acquire such iconic brands as well as the Canadian Mist Distillery,” said Mark Brown, President and Chief Executive Officer, Sazerac Company. “Brown-Forman has done an excellent job building these brands over the years and we expect to invest in the brands and grow their sales in the coming years.”
The sale of these brands is expected to close later this summer. Gibson, Dunn & Crutcher LLP advised Brown-Forman in this transaction. Cooley LLP provided legal advice to Sazerac.
“Early Times and Canadian Mist have been valued brands in our portfolio for many years, and they each have played significant roles in our company’s history,” said Lawson Whiting, President and Chief Executive Officer, Brown-Forman Corporation. “We are thankful to all the people who have distilled, bottled, shipped, marketed, and distributed these brands with care over the years.”
This sale reflects the continued evolution of the company's portfolio strategy to focus on premium brands. Brown-Forman has actively managed the shape and contents of its portfolio over the last decade and a half through developing, acquiring, and divesting various businesses and brands. The company believes this portfolio management, alongside innovation, will allow it to continue to focus on the best growth prospects and value creation over the long term.
Early Times, which is celebrating its 160th anniversary this year, was the first brand Brown-Forman purchased in 1923. Canadian Mist joined its portfolio in 1971 and was the company’s first production operations outside of the United States.
“We are delighted to acquire such iconic brands as well as the Canadian Mist Distillery,” said Mark Brown, President and Chief Executive Officer, Sazerac Company. “Brown-Forman has done an excellent job building these brands over the years and we expect to invest in the brands and grow their sales in the coming years.”
The sale of these brands is expected to close later this summer. Gibson, Dunn & Crutcher LLP advised Brown-Forman in this transaction. Cooley LLP provided legal advice to Sazerac.
Woodford Reserve Bourbon
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Brown-Forman (BF.A) stock price history
The image below shows the stock price history of Brown-Forman (BF.A) the last 3 years. And it's been an ok time for Brown-Forman (BF.A) stockholders over the last 3 years. Over the last 3 years the stock of Brown-Forman (BF.A) increased by 17.64%. Its been a volatile yet slightly positive ride for Brown-Forman stockholders
Brown-Forman (BF.A) stock price history over the last 3 years
Our latest stock valuation of Brown-Forman (9 June 2020)
Based on the Brown-Forman's 4th quarter 2020 earnings report what do we value the group's stock at? Based on their earnings reported our valuation model prices a target price (full value price) for Brown-Forman stock at $64.20 a stock.
We therefore believe the stock of Brown-Forman is overvalued.
We usually recommend that long term and value investors look to enter a stock at least 10% below our target price (full value price) which in this case is $64.20, a good entry point would therefore be at $57.80 or below. We expect the stock of Brown-Forman to pull back slightly from its current price to levels closer to our target price (full value price) in coming weeks and months.
We therefore believe the stock of Brown-Forman is overvalued.
We usually recommend that long term and value investors look to enter a stock at least 10% below our target price (full value price) which in this case is $64.20, a good entry point would therefore be at $57.80 or below. We expect the stock of Brown-Forman to pull back slightly from its current price to levels closer to our target price (full value price) in coming weeks and months.