L Catterton Nears Agreement to Buy Ilegal Mezcal

L Catterton, a consumer-focused private equity firm, is in advanced talks to acquire Ilegal Mezcal, according to people with knowledge of the matter.

(Bloomberg) — L Catterton, a consumer-focused private equity firm, is in advanced talks to acquire Ilegal Mezcal, according to people with knowledge of the matter.

The mezcal maker, which counts VMG Partners and Bacardi Ltd. among its backers, would be valued at less than $200 million in a transaction, the people said, asking not to be identified discussing private information. L Catterton is making the investment through its Latin America fund, the people said.

Deliberations are ongoing and Ilegal Mezcal could still decide against a deal, the people said. Representatives for L Catterton and VMG Partners declined to comment. Spokespeople for Ilegal Mezcal and Barcardi didn’t immediately respond to a request for comment.

Ilegal Mezcal, based in Brooklyn, New York, was founded by John Rexer, who brought bottles of the liquor from Oaxaca, Mexico, in 2004 or so to stock his bar in Antigua, Guatemala, according to company’s website. Rexer shared tales of dressing as a priest and shoving bottles into duffel bags to spirit it across the border, he said on the brand’s website.

Bacardi acquired a minority stake in Ilegal Mezcal in 2017 as mezcal, a smoky flavored liquor, rose in popularity. Global alcohol makers are tapping into the growing hype with Davide Campari-Milano SpA acquiring Montelobos in 2019 and Absolut Vodka distiller Pernod Ricard SA owning Del Maguey mezcal. Diageo Plc’s has a distribution agreement with Mezcal Union.

L Catterton’s Latin America fund’s current investments include two Argentine wineries, Susana Balbo Wines and Luigi Bosca.

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