Asahi sues private equity firms over Independent Liquor price tag

Japanese drinks giant Asahi has filed papers in the Federal Court of Australia in Melbourne over the $1.5 billion price tag on its Independent Liquor purchase from private equity firms Pacific Equity Partners and Unitas Capital.

Asahi Holdings (Australia) and Independent Liquor (NZ) today filed an originating application in the court, alleging the private equity firms made false representations about the liquor company’s financial position, it said in an emailed statement.

The Japanese company claims Independent Liquor’s earnings before interest, tax, depreciation and amortisation was “significantly” inflated during the due diligence and sale process, and that they were provided with “false and misleading financial information” during that time.

“We conducted due diligence thoroughly and in good faith and relied on the figures provided to us,” Atsushi Katsuki, managing director of AHA said. “We are seeking maximum recovery of our loss and we have commenced legal proceedings for this purpose.”

Asahi bought Independent Liquor, trading as Flavoured Beverages Group Holdings, in 2011 when it was on a spending spree having built up a US$4.9 billion war chest.

Around the same time as the Independent Liquor acquisition, it bought Australia’s P&N Beverages and Malaysia’s PepsiCo bottler Permanis Sdn, having purchased Schweppes Australia and New Zealand’s Charlie’s Group in the two years prior.

The Japanese company has filed proceedings against Pacific Equity Partners, Unitas Capital, certain funds controlled by the two firms, management services companies for the firms, and certain directors of both private equity companies.

Asahi filed the papers after “in-depth investigations” after the acquisitions, and is seeking damages from losses suffered as a result of the private equity firms’ conduct, the Japanese company said.

A spokesperson for Pacific Equity wasn’t immediately available for comment.