Davide Campari-Milano buys Brazilian brand Sagatiba

Davide Campari-Milano S.p.A. yesterday acquired Brazilian brand Sagatiba, a market leader in the increasingly attractive market of premium cachaça in Brazil, for $26 million.

Campari, the producer of its namesake bittersweet, red liqueur, will also pay an earn-out calculated as 7.5 per cent of annual sales in the eight years following the deal's closing.

The acquired business includes the Sagatiba trademarks and the related business assets, including finished goods.

Founded by Brazilian entrepreneur Marcos de Moraes in 2004, Sagatiba's portfolio offers consumers a variety of high quality cachaça, including an unaged Pura, primarily marketed as a mixed drink for the younger generation and an aged portfolio that includes Velha and Preciosa that is aimed at the older generation, who prefer to drink the aged cachaça straight.

Sagatiba is one of the world's most consumed spirits with 112,000 nine-litre cases being consumed last year in Brazil, which accounts for two thirds of the brand's global sales.

Cachaça is the most important spirit in Brazil. It is derived from sugarcane and is the key ingredient in the classic 'caipirinha', Brazil's famed lime and sugar drink. Global sales of cachaça exceeded 85 million nine-litre cases on a worldwide basis in 2010. Brazil represents 99 per cent of the global sales.