Today, it is investigating other acquisitions in Europe and the management are confident, because of their successful experiences to date. “This is a strong equity story,” says Julie, “as Dugas is evolving from being a purely French distributor into a European leader.” There is a wider lesson that she draws as an investor: “if the company has a strong position and management team, don’t hesitate to push for acquisitions.”
The company’s logistical and financial operations have also been improved. “These aspects are critical to value creation even if they do not create immediately quantifiable value alone,” says Stanislas.
“At the start, we did not fully expect the time it would take to help the management achieve the necessary structure to support its growth pace,” says Equistone’s Edouard Fillon, “but we have been successful.”
Another major area for investment has been digital. Although the premium spirits market has not been disrupted by digitalisation, Equistone and the Dugas management were keen to anticipate potential future change.
An online store for individual customers called dugasclubexpert.fr was launched in 2019, making all of Dugas’ products visible and available. The idea is to combine the convenience of e-commerce with the passion and expertise of the specialist retailers. “It has been important to make this a partnership,” says Stanislas. And, by building its digital presence, Dugas can become a gateway through which premium brands can directly access premium customers.
The results have been striking. In the past couple of years, sales and volumes have more than doubled, with EBITDA rising at a similar pace – a figure set to double in the medium term.
A positive chemistry between Equistone and the management has developed, says Stanislas. “We are seen as a partner, not just a board member with certain rights. The management team is very keen to hear our views and feedback about their initiatives; we encourage them to test new ideas. As a result, the company is performing strongly and successfully generating new projects.”
So this five-year-old investment is developing well. Skilfully blended, it’s showing great balance and depth of character and will clearly appeal to the premium buyer. Just like a fine rum, in fact.” ☐
A full version of this article appeared in PLATFORM 07, Summer 2022