Plenty Of Upside For Deep Eddy, But Price May Have Been Steep As Well

Following last Thursday’s acquisition of Impact “Hot Brand” Deep Eddy vodka by Heaven Hill Brands, Deep Eddy CEO Eric Dopkins says it’s “business as usual,” as the brand’s new owners look to continue its explosive growth. Meanwhile, a source familiar with the deal tells SND that the $165 million-$300 million valuation of the brand floated in the Wall Street Journal was “way low” compared with the actual sale price.

Deep Eddy increased 130% to 330,000 cases last year, according to Impact Databank, and is projected to rise to 675,000 cases this year. By comparison, Beam Suntory paid $605 million in 2012 to acquire Pinnacle vodka and Calico Jack rum from White Rock Distilleries. At the time, Pinnacle was at about 2.1 million cases, and has since grown to 2.7 million, although its $13 price point is lower than Deep Eddy’s $18 a bottle.

While it has enjoyed rapid growth, Deep Eddy appears to have considerable upside. While Texas and Florida are its two biggest markets, the vodka brand remains relatively small in some of the biggest markets in the U.S., including California, New York, Illinois and New Jersey.

In May, the Journal reported that Deep Eddy had hired UBS to seek a buyer for the business, but Deep Eddy at the time denied that it was looking to sell. “We had in fact hired UBS and were working with them to evaluate the strategic options,” Dopkins tells SND. “At that time, we had yet to determine the path we wanted to take. Heaven Hill was not in the plan at that point, nor was any buyer. Over the following months, after several strategic inquiries, the Heaven Hill organization led by chairman Max Shapira approached our bankers with a plan that our board felt was the best option for Deep Eddy.” Dopkins adds that following the acquisition, he will report to Shapira and “work on leveraging any capabilities and support Heaven Hill can provide.”

Tagged : Deep Eddy, Deep Eddy Vodka, spirits, vodka

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