Bala Cynwyd, Pa., July 16 - Central European Distribution Corporation (Nasdaq: CEDC) today announced that it has signed a binding Letter of Intent (LOI) to acquire a significant majority interest in a company holding various alcoholic beverage production and distribution assets which include the number one selling premium vodka brand in Russia,
Parliament Vodka.
The LOI is subject to execution of a definitive acquisition agreement,which would be subject to customary closing conditions, including CEDC board approval. The acquisition is expected to close within the next 6 months and will be financed through a combination of cash, debt and equity.
William Carey, President and CEO, commented: "This is an excellent opportunity for CEDC to take its first step in the largest vodka market in the world, Russia. The Russian spirits market continues to experience a premiumization effect, backed by the strong growth of the local economy, in which the consumer continues to trade up to premium brands. The Parliament brand has continued to outperform the market with an expected 2007 volume growth of over 25% with expected sales of 2.6 million 9 liter cases.
William Carey continued, "The company has national sales reach with over 200 salesmen who cover almost all regions of Russia. This strong local distribution platform gives us the opportunity to not only grow the existing business but also expand sales with new brands both local and imported. We would expect this acquisition, if completed, to be accretive to earnings on an annualized basis by $0.10 to $0.20 per fully diluted share."