Irish drinks group C&C
C&C, which sells cider under the Magners and Bulmers brands, acquired Hornsby's cider from E. & J. Gallo Winery. It will pay between 16.4 million euros (14 million pounds) and 20 million euros (17.1 million pounds) in cash, depending on the performance of the business in the coming months.
It said there were no regulatory barriers to the transaction.
The United States is a key market for C&C, where sales grew 38 percent in the year to February, compared to 3.6 percent in the United Kingdom. C&C expects Magners volumes to grow by 20 percent in the United States in the current financial year.
The deal will give C&C around 20 percent of U.S. cider sales that total around 400,000 to 500,000 hectolitres per year, according to C&C. The group sold around 2.37 million hectolitres of cider last year in the United Kingdom.
What they are looking for from an acquisition in the United States is distribution, said Liam Igoe, an analyst with Goodbody stockbrokers in Dublin. It's a logical, positive move.
Hornsby's is primarily sold in shops on the west coast of the United States, while Magners is primarily sold in bars and restaurants on the east coast, C&C said.
The transaction more than doubles our volume in a growing market; broadens the scope of our cider portfolio; and, presents significant opportunity to develop the Hornsby's brand throughout North America, C&C Chief Executive Officer Stephen Glancey said in a statement.
Shares in the group were up 3.4 percent at 3.03 euros at 1320 GMT.
(Reporting by Conor Humphries. Editing by Jane Merriman)