Cumbria’s Lakes Distillery has been valued at approximately £71 million in advance of a potential take over by English wine maker Nyetimber.
The directors of the distillery, based near the Lake District National park, have confirmed that they have received a fair and reasonable cash offer from England’s leading sparkling wine producer. Shareholders are yet to approve the purchase, but the directors are set to encourage them to vote in favour of the deal.
The Lakes hope that the potential deal will aid the distillery in a achieving their ambition to reach 1% of the global luxury spirits market by 2030. James Pennefather, Lakes CEO, noted that they require at least £10 million funding over the next three years to increase their production capacity and grow their brand.
Pennefather added that “the offer by Nyetimber offers the prospect of an owner with the same shared strategic vision and crucially, certainty of funding”, thereby facilitating this aspirational goal.
As well as the funding for inceased production, Nyetimber’s investment also offers The Lakes increased brand exposure and routes to market internationally. Nyetimber already have strong relationships with some of the world’s leading bars and retailers that would greatly benefit The Lakes.
When discussing the offer, The Lakes’ directors recognise that they currently face “a tough market for raising capital” and that there is a “degree of uncertainty” regarding their ability to independently fund their project.
Even though they have successfully raised £30 million in investment since they were founded, recent financial reports recorded an audited loss of £1.3 million in earnings for the year ending 30th June 2023.
Despite these difficulties, Nyetimber recognises The Lakes Distillery’s potential. The distillery was founded in 2011 with production starting in December 2014. In the relatively short time since, The Lakes brand and their sherry-led house style have become one of the leading premium whisky brands in the UK. In addition to their whisky, the distillery also produces award winning gin and vodka.
Nyetimber believe that The Lakes Distillery is perfectly primed to grow their share of the market both domestically and globally, and that they are the ideal partners to help The Lakes achieve this.
Eric Heerema, CEO of Nyetimber, has said: “We believe that this potential acquisition represents an opportunity for us to expand our capabilities, drive exciting new growth and support The Lakes in delivering on its ambition to be a globally recognised spirits brand”, noting the two companies’ shared strategic vision.
Indeed, one of Nyetimber’s long term objectives is to establish a wider, “globally relevant” English luxury spirits group. The deal to take over The Lakes Distillery would be a significant step towards this goal.
At the time of writing the deal is yet to be approved and, even if it is, it will be subject to a number of conditions. Nevertheless, the deal is still expected to be confirmed within the coming months.
The offer for The Lakes Distillery is a massive development for the whisky industry south of the border. A few years ago, a valuation like this for an English distillery would have been unimaginable - laughable even! This news symbolises the massive steps taken by English whisky in recent years and how spirit made in England is now held in the same regard as some of the best known whiskies in the world.
If the deal goes ahead, The Lakes working with Nyetimber would not only benefit the companies involved but English whisky as a whole, potential taking the ever-growing industry to the next level.