C&C Group Shares Advance Most in Month on Hornsby’s Acquisition
C&C Group Plc (GCC) rose the most in a month in Dublin trading after saying it acquired Hornsby’s, the second-largest cider maker in the U.S., for as much as 20 million euros ($28 million).
C&C rose as much as 4.1 percent in Dublin to 3.05 euros, the biggest intraday gain since Oct. 6. It traded at 3.0525 euros at 3:10 p.m. The purchase makes C&C the second largest cider company in the U.S. with an estimated 20 percent share, according to a regulatory statement.
“We think we can rejuvenate the brand, and basically tap into a huge growth market with massive potential,” said Chief Executive Officer Stephen Glancey in a telephone interview today. The consumer environment remains “challenging” Glancey said, maintaining C&C’s full-year operating profit guidance of 108 million euros to 115 million euros.
C&C is betting on international cider sales, including in the U.S., where the cider market is growing at about 26 percent a year, Glancey said. Hornsby’s, primarily a west coast off- trade brand in the U.S., sold 61,000 hectolitres in 2010 with net revenue of $11.7 million, according to today’s statement. C&C sold 45,000 hectoliters of its Magners cider brand in the U.S. in the year ended Feb. 2011, mainly in the east coast.
If U.S. cider consumption rose to between 1 and 2 million hectoliters in five years, that would be “huge,” according to Kenny Neison, C&C’s chief financial officer.
About 10 million hectoliters of cider a year is consumed in the U.K., said Glancey.
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