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Loch Lomond Distillery is sold in deal worth millions

DRINKS veteran Sandy Bulloch and his family have finally sold their Loch Lomond Distillery Company in a deal likely to be worth tens of millions of pounds.

Private equity group Exponent has taken a majority stake in the business, having linked up with a new executive team led by Colin Matthews to stage a management buy-in.

The deal took a year to conclude after the first approach made by Exponent, which owns the Quorn food brand, to the Bulloch family.

Mr Matthews has brought together experienced drinks industry executives to lead the business, which spans two whisky distilleries, a major bottling operation and the High Commissioner blended Scotch and Glen's vodka brands.

Loch Lomond Group, the company set up to facility the acquisition, will be chaired by former Diageo chief financial officer Nick Rose. It will feature a senior role for Richard Miles, a former chief financial officer for Diageo's global supply business.

The executive team have invested in the business, though no information was provided on the size or value of their stakes, or on the value of the acquisition.

The deal marks the first move by Exponent - which typically invests in business worth between £75 million and £350m - into Scotch whisky distilling.

It now has the majority stake in a company that owns the Loch Lomond Distillery in Alexandria and the Glen Scotia malt distillery in Campbeltown, both of which produce single malts.

The deal also includes the Glen Catrine Bonded Warehouse in Mauchline, one of the largest independent bottling plants in Scotland, where High Commissioner and Glen's vodka are produced. The site bottles whisky, vodka, gin, vodka, rum and brandy for international markets and private labels.

Mr Matthews, who led Imperial Tobacco's businesses in Africa, the Middle East, and the Indian sub-continent, said the new owners would invest in the business, as well as target new export markets.

Stating it was "business as usual" for the company's staff, which numbered 56 in its most recent accounts, he said: "It is in my plans at a fairly early stage to further invest and enhance the capacity of both the distillery and the bottling plant, which has made them all very happy.

"They've all welcomed the change. Sometimes change is a bit concerning because you don't know what's going to happen, but having consulted and had a number of good meetings with them, they have all welcomed it."

Recent deals in the Scotch whisky industry have ranged from Suntory's £9.8 billion acquisition of Teacher's and Laphroaig owner Beam in January, to the sale of Bruichladdich Distillery on Islay to Remy Cointreau for £58m in 2012.

Alan Gray, author of the Scotch Whisky Industry Review, said it was "difficult" to gauge the value of the deal, partly because of the private nature of the business.

But he highlighted several factors that may have attracted the new owners to the deal.

Mr Gray said: "The good thing about it is that it is a totally integrated group. They have got a grain and a malt distillery, they've got the bottling hall at Mauchline, Glen Catrine, [and] they've also got High Commissioner, which is quite a big selling brand. I reckon it is [the] number three in the UK and sells a reasonable amount abroad as well.

"They've got the Loch Lomond and Glen Scotia single malts in addition to owning the distilleries, and of course they have gin and vodka and other products.

"It really is a totally integrated group and from that point of view there would obviously be a bit of a premium on it. There are not many companies like that."

Mr Gray also noted the potential in the Loch Lomond and Glen Scotia malts. He said Loch Lomond sold 50,000 cases a year while Glen Scotia, one of only two distilleries in Campebeltown, sold 1000 to 1500.

Mr Matthews reiterated the point, stating: "I think in the name Loch Lomond we have one of the most iconic names in the whole of Scotland, and it has been under-exploited to a certain extent just now. That was the choice of a family ownership.

"But we also have a distillery down in Campbeltown which makes the Glen Scotia brand. It [Campbeltown] was one of the key centres for Scotch whisky distilling for many years. We're going to underline that and bring that brand to a number of markets around the world where already consumers have shown there is a great deal of appetite for it."

Inverarity Morton, the Glasgow-based drinks wholesaler, remains owned by the Bulloch family.

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