What valuation multiples do spirits acquirers typically use for independent premium brands?

Acquisition valuations for independent spirits brands typically fall between **5–10× the last 12 months' sales**, usually at the lower end of that range.

**Key acquirers and their activity:** - **Diageo and Pernod Ricard** lead M&A activity among the major 12 multinational spirits groups - **Campari and Constellation** are continually active in the market - **Bacardi, Brown Forman, Beam, Moët Hennessy, and William Grant** make less frequent acquisitions

**Valuation approach:** - Sales multiples are the simplest guideline and easiest to apply, since volume and retail price data are publicly available - DCF (discounted cash flow) calculations form the basis of actual offers, but sales multiples provide a practical rule of thumb - Some argue that **Contribution After Marketing (CAM)** — gross profit less marketing spend — is the more relevant metric, though this data is rarely disclosed - Profitability can complicate multiples: profitable brands may be valued on EBITDA multiples (often lower), while loss-making brands can be valued on sales multiples, creating an incentive to show growth over near-term profit

**Market trends:** - Large acquirers are becoming more selective, particularly focusing on larger acquisitions above 50–100k 9-litre cases, as they struggle to give adequate sales priority to smaller brands - US opportunities continue to dominate acquisition strategy, favouring categories like tequila and whiskey - Acquisitions serve multiple purposes beyond traditional ROI — eliminating competition and filling portfolio gaps as categories fragment are also key drivers