Jose Cuervo, the world’s biggest tequila producer that traces its origins back to the late 18th century, is considering an initial public offering, say reports. The move will be keenly watched by other family businesses looking to raise money for expansion.
Controlled by the Mexico-based Beckmann family, who own 70% of the business through a holding group called Becle, the listing of Jose Cuervo would raise a considerable sum of money; indeed, $750 million, or more, say reports. That could provide a valuable sum for the family to make further acquisitions. Last year, Jose Cuervo bought the Irish Bushmills whiskey brand. The group also owns a number of other premium tequila brands as well as other spirit brands.
Some other big name family-controlled drinks groups have been pursuing a more aggressive acquisition strategy in recent years as they attempt to gain market share. Earlier this year Davide Campari-Milano, controlled by the Garavoglia family, bought family-owned drinks group Grand Marnier. And Bacardi, also family owned, has been one of the most acquisitive drinks groups anywhere in the last five years.
If Jose Cuervo does list it will no doubt be of interest to other family businesses looking to raise finance to grow their companies. In recent years, many family businesses of a certain size have looked to finance expansion from external sources. IPOs are often popular with families because they don’t create debt and the family can still retain control over the business through dual class shares.
Nevertheless, some families don’t like listings because of stricter reporting and governance requirements. And particularly annoying for families is the quarterly reporting schedule of their results.