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Italian Company To Buy 80% Of SAMMY HAGAR's Cabo Wabo Tequila For $80 Million

May 7, 2007

Hemscott.com reports that Davide Campari-Milano SpA, the Italian beverage group, said that it has signed an agreement to buy an 80 percent stake in Cabo Wabo Tequila for $80 million.

Cabo Wabo was founded in 1996 by Sammy Hagar, former lead singer of the band VAN HALEN, who is also a major shareholder, it said.

The deal, which is expected to be closed in Jan 2008, values Cabo Wabo 11.8 times expected EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) for 2007, it said.

The "ultra premium" brand sells about 70,000 nine-litre cases a year, mainly in the U.S., and is one of the fastest growing brands in the U.S. spirits market, Campari said.

The company said it can purchase the remaining 20 percent in two tranches. A 15 percent stake can be bought in 2012 and a 5 percent stake in 2015.

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