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Edinburgh-based private equity outfit Inverleith takes whisky business public

The Artisanal Spirits Company (ASC”, owner of The Scotch Malt Whisky Society (SMWS) and  the largest collection of single malt single cask whiskies in the world, as well as a complementary range of premium spirits, has begun trading on AIM with an opening price of 118.75p per share. 

This price delivers a return of approximately 3x cost on the price Edinburgh-based private equity firm Inverleith Fund invested into the Company nearly three years ago. 

Inverleith also has majority shareholdings in consumer brands Good Hemp, which produces food & drink products from hemp seed; Montezuma’s, a premium British chocolate manufacturer; Planet Organic, the UK’s leading natural and organic retailer; and Montane, a fast-paced mountain sports outdoor clothing brand.

The Initial Public Offering raised GBP15 million for ASC. In addition, GBP11 million was raised to provide a partial exit for existing shareholders. The opening price represents a market capitalisation of over GBP80 million. The listing attracted strong interest from high quality institutional investors. UK members of SMWS invested GBP2.64 million as part of the oversubscribed members’ offer.

The IPO delivers a highly successful outcome for all parties involved. The access to new capital will enable ASC, headquartered in Edinburgh, to continue its dynamic growth journey. Capital is primarily being used to fund further investment in whisky and other spirits stock, along with cask wood, the promotion of its membership offering as well as existing and new venues, brand and digital development, and supply chain optimisation.

Inverleith LLP had a partial exit of 24 per cent of its stake in the Company and still owns over 20 per cent of the new enlarged Company. The IPO delivers a return of approximately 3x cost on the price that Inverleith Fund invested into the Company. Inverleith also manages the Hothouse investor club of HNWs who invested into the Company in 2015 under an EIS scheme and the IPO delivers a return for those shareholders in excess of 4x cost.

The business was acquired from The Glenmorangie Company, part of LVMH. Since its acquisition, SMWS has been transformed from a UK focused company into a global business with a presence in more than 30 international markets and significant revenue growth coming from the USA, China, Germany and Japan. It continues at the forefront of the release of premium single malt, single cask whiskies, offered to its worldwide membership, together with a variety of additional premium spirits. Its membership offering is experience based, providing members with access to unique industry and tastings events around the world, at SMWS’s owned venues and partner bars.

David Ridley, Executive Managing Director of the Group, says: “The successful fundraise and move onto the public markets, which gave our loyal and discerning members the opportunity to become shareholders, is an exciting landmark.

“Our members are at the heart of everything we do, and we believe our status on AIM will enable us to access the capital required to bring them an even wider variety of premium, limited edition whiskies, spirits and inspiring experiences.

“Inverleith has been an exceptional value-add investor since the acquisition out of The Glenmorangie Company. Their collective industry knowledge and experience has helped us to achieve exceptional growth in the last few years and I would like to thank the team at Inverleith for their role in getting us to this exciting stage. We look forward to maintaining our relationship with them as our largest shareholder.”

Paul Skipworth, Managing Partner at Inverleith LLP, who remains as Deputy Chair of ASC, having handed over the Chair role in recent weeks to Mark Hunter, former President and CEO of Moldon Coors, says: “2020 was a strong year for The Artisanal Spirits Company, as it continued to deliver against the rising demand for premium single cask single malt whiskies around the globe. Having laid the foundations for growth over the last few years, e-commerce sales growth was especially strong, as well as international success continuing in key markets around the world. The listing on AIM is the latest step in what we believe will continue to be an exciting future for this unique business. At Inverleith, we’re delighted to have been able to support David Ridley and his exceptional management team over the last few years and look forward to continuing as a supportive minority shareholder.” 

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