THE Loch Lomond Distillery Company, owned by drinks industry veteran Sandy Bulloch, is reported to be in the sights of private equity firm Exponent.

Loch Lomond, which employs around 65 people, stayed tight-lipped about the prospects for a deal, which comes only three months after the company released accounts showing that it had fallen to a £200,000 pre-tax loss.

Last year's sale of Islay's Bruichladdich distillery to French drinks giant Remy Cointreau for £58 million has led to speculation that there may be further merger and acquisition activity as investors seek to profit from burgeoning demand in emerging markets.

Exponent owns meat-free meals company Quorn Foods and has investments in the likes of Ambassador Theatre Group, HSS, the tool-hire firm, and Radley, the handbag manufacturer.

It was reported by Sky News to be the frontrunner to acquire Loch Lomond, which is based in Alexandria, West Dunbartonshire, and may do so as part of a consortium of investors.

Loch Lomond's key products include High Commissioner blended whisky and Glen's Vodka.

As well as its distillery, Loch Lomond has interests in bonded warehouses, wine and spirit wholesaling and spirit broking.

The Bulloch family bought the Loch Lomond distillery in 1985, then added a set of grain stills in 1993 to allow both grain and malt whiskies to be produced.

The family can trace its origins in the drinks trade back to a whisky wholesale business in Glasgow in 1842.