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Valuing intangible assets: A case study at Burn Stewart Distillers

10 October 2008 - 2:00pm — Contributor
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Stuart Whitwell of Intangible Business outlines how Burns Stewart Distillery enhanced lending requirements by recognising the hidden value in of its intangible assets.

 

In the previous article we looked at how intangible assets could unlock hidden value and how to identify it.

Intangible Business was recently involved in valuing the intangible assets related to a Scotch whisky distillery, Burn Stewart Distillers, for the Belgium-based bank KBC. Burns Stewart Distillers owns and markets a number of whisky brands internationally and required investment to support the growth aspirations of the company.

Win a bottle of whisky. THIS COMPETITION IS NOW CLOSED
Answer the following question by emailing the editor and Burns Stewart Distillers will provide the winner with a bottle of Scotch. Should more than one person get the correct answer, the name will be drawn from a hat. In the 19th Century, what was the single most important change to the Scotch whisky industry?

We valued the brands of premium single malts Bunnahabhain, Tobermory and Deanston alongside mainstream brands Scottish Leader and Black Bottle. We also valued the significant volume of Scotch inventory which supported the brands. In doing this, we were able to demonstrate to the bank the considerable value held by these two important assets so, when combined with the value of the distillery itself, the value and security was enhanced.

£31m was loaned to Burn Stewart Distillers by KBC Business Capital. Burn Stewart's new facilities use its accounts receivable and significant inventory to provide increased headroom, and have also been used to restructure the existing debt package from an amortising term debt structure to a predominately revolving facility.