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Drake to take Virginia Black public
Posted on Thursday, 11 January 2018 14:47
The public is about to get its hands on shares in Grammy-award winning recording artist Drake’s whiskey brand as the singer and songwriter agrees to launch a stock market flotation of Virginia Black in a bid to raise about USD 30.00 million in cash.
Spirits producer Brent Hocking and the platinum-selling rapper together announced intentions to file for an initial public offering (IPO) that will allow any investor the opportunity to buy stock in the bourbon maker, hopefully, by the end of the first quarter.
Drake and Brent founded Virginia Black in September 2016 and have decided to take a non-traditional route to the stock market, which allows the co-founders to promote the offering despite the usual ‘quiet period’ put in place by the Securities and Exchange Commission during a flotation.
The company instead plans to launch an IPO through a regulatory A+ offering, a form of crowdfunding by way of a listing in the US.
TriPoint Global Equities, which is working in co-operation with its online division Banq, will be the lead manager and bookrunner for the flotation.
Virginia Black intends to use the proceeds from the deal to fund domestic and international expansion, as well as sales and marketing, working capital and general corporate purposes.
Regulatory A+ offerings are becoming the preferred choice among celebrity endorsed brands as it offers more flexibility than traditional IPOs.
Some of Eminem’s song catalogue was offered to the public through one of these listings in September after producers Jeff and Mark Bass agreed to sell 25.0 per cent of their songs through a start-up called Royalty Flow.
Virginia Black is an aged bourbon whiskey with high-rye content and was voted one of the top 5 spirits in 2016 by Wally’s Wine and top 100 spirits of 2017 by Wine Enthusiast.
The group’s product surpasses competitive brands Jack Daniels, Jim Beam and Maker’s Mark in flavour profile ratings and aims to capture a market share from both brown spirits and cognac.
US whiskey volumes were up 6.8 per cent, while revenue jumped 7.7 per cent to USD 3.10 billion in 2016, with cognac volume 12.9 per cent higher as turnover increased 15.3 per cent to USD 1.50 billion in the same year.
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