TENCENT INVESTOR BEIJING’S HILLHOUSE CAPITAL BOUGHT SCOTCH DISTILLERY LOCH LOMOND
By David Ma
The Beijing-based Hillhouse Capital Group has acquired Scottish distillery Loch Lomond Group in a deal reportedly worth £400m (USD508m), making it one of the biggest deals the Scotch Whisky industry has seen in recent years.
Loch Lomond Group has a history dating back to the early 19th century, it was bought out by London-based Exponent Private Equity from the Bulloch family five years ago for a reported £210m.
Its key Scotch Whisky brands include Loch Lomond, Glen Scotia, Littlemill, High Commissioner as well as Glen’s Vodka and Ben Lomond Scottish Gin.
The company’s production spans sites across Scotland. It operates its Loch Lomond malt and grain distilleries at Alexandria in Dunbartonshire, Glen Scotia distillery in Campbeltown and has its own bottling plant in Ayrshire.
The Hillhouse Capital Group was founded by Chinese Yale graduate Zhang Lei in 2005, the group currently has more than USD50b under management.
Hillhouse Capital is known for its early investments in Tencent, JD.com and Baidu, the Chinese equivalents of Facebook, Ebay and Google.
It has also invested in a number of high-profile Chinese technology start-ups, such as ride-hailing website Didi, electric car maker Nio and online on-demand platform Meituan.
Exponent Private Equity said in the announcement that it had invested significantly in Loch Lomond since acqusition, the business now generates about 70% of its revenue from exports versus fewer than 10% in 2014.
It also said that teaming up with Hillhouse offers a strong partner for the business to further develop its international presence, particularly in Asia where whisky has become increasingly popular, and a market where Hillhouse has deep knowledge and strong business relationships.
Loch Lomond CEO Colin Matthews said: “We believe now is the right time to move forward into the next stage of our growth strategy as we look to innovate further, extend our portfolio of brands and continue to expand our international presence, particularly in Asia where Hillhouse has significant experience.”
Partner of Hillhouse Capital Wei Cao added: “Hillhouse’s experienced operational team will work closely with Loch Lomond’s management to help it offer a premium consumer experience in international markets through channels like e-commerce and new retail.”
“We believe that the strongest advantages in business are innovative and differentiated products and management teams, which is why we are so excited to help Loch Lomond realise the potential of its outstanding brands in huge new consumer markets, such as Asia."
(the writer can be contacted at: DavidMa@thewinechronicle.com)
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