Adding to its growing lineup of craft brands, Founders First has spent $1.5 million to buy Kangaroo Island Distillery.
It has also acquired the land and buildings of the South Australian gin distillery for another $550,000.
The acquisition follows closely on the heels of Founders First’s half yearly results, announced last week.
The report showed that seven transactions were made in the six-month period, bringing its brand investments up to nine with a total of $6.8 million spent on bringing new businesses into its portfolio.
Revenues grew to $4.5 million which the group said showed an increase of 189 per cent on the same period last year, and 42 per cent of which was put down to organic growth.
For the half year to 31st December, the investment business reported a loss of $4.1 million, after spending $1.5 million on legal and professional fees, as well as additional one-off bills relating to its December 2019 listing on the ASX.
It calculated a “normalised loss” of $2.9 million, excluding the costs associated with capital raising, listing and brand investments.
Kangaroo Island Distillery acquisition
Kangaroo Island Distillery has some pedigree in the sector. Founded in 2006 by Jon and Sarah Lark, it was “inspired” by Tasmania’s Lark Distillery, the founder of which is Jon’s brother Bill Lark.
Kangaroo Island’s O’Gin was named the World’s Best Contemporary Gin at the 2019 International Wine and Spirits competition in the UK.
Founders First said in a statement to the ASX that the acquisition demonstrates “its momentum and commitment to selectively invest and help accelerate some of the best brands in the country”.
Managing director Mark Haysman said that the craft spirits market continues to demonstrate “exponential growth”.
“KIS is a very important and complementary addition to our internationally acclaimed spirits portfolio,” he said.
Kangaroo Island Spirits founder Jon Lark said Founders First was a “fantastic partner” for the brand.
“We intend to use some of the purchase monies to invest back into Founders First (on market), Sarah and I truly believe in the Founders First strategy and model, and we think their expertise will be invaluable in growing the KI business. “
The Larks will stay on with the business, signing employment agreements to continue in their ambassadorial and operational capacities.
Founders First venues
Founders First has also been busy setting up a network of venues through which its partner brands can be sold, acquiring Potters Brewery Resort and Hotel as well as a site at Moonee Ponds.
Founders first said the developments marked “significant progress” as it prepares to expand its venue footprint.
“While I am proud of what the FFL team have achieved to date, we are really at the beginning of our journey,” said CEO Mark Haysman.
“Our job now is to scale and drive growth as quickly as we can. We will ultimately be judged by what we achieve over the next few years, as we deliver on our plan to be a significant player in this exciting, growing and profitable category.”