Sammy Hagar's tequila gets a big shot

The former Van Halen frontman is selling a large stake of his famous Cabo Wabo tequila.

By Ian Mount, FSB contributor

(FSB Magazine) -- Former Van Halen frontman Sammy Hagar knows how to party profitably. In May he inked a deal to sell 80 percent of his Cabo Wabo tequila business to Gruppo Campari for $80 million.

Starting as the house tequila at Hagar's Cabo Wabo Cantina in Cabo San Lucas, Mexico, in 1996, the spirit grew into a popular premium brand, with more than 140,000 cases sold in 2006.

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Hagar says the deal will lead to worldwide distribution, which would be difficult to accomplish on his own. "I don't like working that hard," he says.

The price, 11.8 times expected 2007 Ebitda, is a respectable multiple, according to Jim Carroll, a managing director of investment bank Hunter Wise (hunterwise.com).

And, he adds, Hagar is "astute" to retain a 20 percent stake: "Cabo Wabo will surely benefit from greater market acceptance and higher profitability as part of a larger corporation."  Top of page

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.