American Whiskey Producing Giant MGP Shocks Bourbon World With Startlingly Expensive Acquisition of Penelope

MGP Ingredients has acquired 100% of Penelope Bourbon.

Indiana’s whiskey-producing giant, MGP Ingredients, announced Monday that its subsidiary, Luxco, Inc., acquired 100% of Penelope Bourbon for a surprisingly high price. Penelope sold for $105 million upfront with a maximum potential payout of $110.8 million by the end of 2025 if “certain performance conditions” are met.

There have been financially larger American whiskey acquisitions in recent memory, such as Campari’s 2022 purchase of Wilderness Trail, which valued the distillery at $600 million. This is different, however, because Penelope is a bottler, not a distiller, which greatly reduces its financial value. In fact, Penelope was already bottling MGP distillate, which means Penelope fans shouldn’t need to worry about the products changing.

“We are excited to welcome Penelope as part of our expanding premium-plus brand portfolio,” David Colo, president and CEO of MGP Ingredients, said in a news release. “This acquisition aligns well with our premiumization strategy and our focus on growing high potential, high margin brands. Penelope is an excellent addition to our Branded Spirits portfolio as we look to expand its availability throughout our national distribution platform. We are enthusiastic about this acquisition and its ability to further our participation in the growing American Whiskey category while delivering meaningful long-term growth.”

The transaction is expected to close in June.

By buying Penelope, MGP now owns all of the brand’s intellectual property and inventory of bottled products and aging whiskey. Since Penelope purchased all of its aging whiskey from MGP to begin with, MGP is essentially buying back barrels from Penelope, as well as bringing a flourishing brand in-house.

“MGP has been an incredible partner of ours since we started our business in 2018,” said Michael Paladini, CEO and co-founder of Penelope. “We are excited to take our partnership to the next level with the goal of accelerating Penelope’s growth for years to come.”

Founded in 2018, Penelope is a young brand that has grown remarkably fast. Already, it’s sold in more than 30 states and four countries. Popular, well-distributed and critically acclaimed, Penelope is a great brand for MGP to purchase — albeit at a higher price than expected for a non-distilling producer.

“Since our initial product launch in 2019, it has been amazing to watch consumers embrace our brand,” said Daniel Polise, COO and c0-founder of Penelope. “We look forward to expanding our partnership with MGP and building on our legacy.”

MGP is one of the largest whiskey producers in the U.S. and supplies distillate for many notable brands. With this acquisition, MGP continues to attempt to rectify its weak point: in-house brands. MGP’s brands, like Rossville Union and George Remus, have solid reputations among whiskey enthusiasts but aren’t exactly major cash cows.

In 2021, MGP acquired St. Louis-based Luxco for $475 million. Luxco’s Lux Row distillery is based in Bardstown, Kentucky, and produces bourbon brands like Ezra Brooks, Rebel and Daviess County.

The acquisition of Penelope is MGP’s latest step toward becoming an owner of popular brands and not only a whiskey supplier.

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