Sparkling wine supplier Nyetimber has tabled a bid to buy fellow UK business The Lakes Distillery.

An offer that values The Lakes Distillery at £71m ($89.3m), including debt, has the backing of the whisky and gin maker’s board.

In a stock-exchange filing, The Lakes Distillery said its directors believe the offer to be “fair and reasonable”.

Nyetimber described its target as “the leading English distiller of premium-quality single malt whisky”. It said The Lakes Distillery had a “sizeable opportunity to grow its market share within the UK single-malt whisky market”.

The bid values the company's issued – and to be issued – share capital at around £46.1m.

On that basis, the offer implies an enterprise value for the business of £71m, based on its directors’ expectations for its debt levels at the end of May, less cash and equivalents. The enterprise value is equivalent to 12.2 times The Lakes Distillery’s net revenues in its 2023 fiscal year.

The Lakes Distillery investors that own just under 28% of the company have agreed to sell their shares to Nyetimber. Its offer will go to a shareholder vote.

James Pennefather, the former Diageo and William Grant & Sons executive who became The Lakes Distillery CEO last year, said a sale to Nyetimber would help the business meet its international ambitions.

“The Lakes Board is enthusiastic about its ambitious new ten-year plan to achieve a 1% share of the global luxury dark spirits market by 2030,” Pennefather said.

“This plan entails an additional funding requirement of £10m over the next three years to provide the necessary growth capital to increase production capacity, to further invest in laying down maturing spirit stocks and to grow the brand's footprint in international markets. The offer by Nyetimber offers the prospect of an owner with the same shared strategic vision and, crucially, certainty of funding.

“We are pleased to recommend the acquisition to our shareholders and I look forward to working with [Nyetimber CEO] Eric [Heerema] and the Nyetimber team as we continue our journey to build a luxury international spirits brand.”

Nyetimber had its own change at the top of the business last year. In January, the company said Richard Carter had resigned as chief executive after a month in the role. Heerema, who has owned Nyetimber since 2006, took the helm.

Heerema said acquiring The Lakes Distillery would boost Nyetimber’s growth prospects.

“We believe that this potential acquisition represents an opportunity for us to expand our capabilities, drive exciting new growth and support The Lakes in delivering on its ambition to be a globally recognised spirits brand,” he said. “Not only do we have an inherent understanding and strong relationships with the world’s leading luxury restaurants, bars and retailers but we also have a shared strategic vision.”

Heerema purchased Nyetimber for £7.4m in 2006 ($14.1m at the time) and the estate has more than 850 acres across West Sussex, Hampshire and Kent.

Pennefather, who spent 14 years at Diageo before eight at William Grant, succeeded The Lakes Distillery co-founder Nigel Mills last June.

Alongside Paul Currie, Mills set up The Lakes Distillery in 2012. The company, based in Cumbria, sells blended and single malt whiskies, as well as gin and vodka.

The Lakes Distillery launched its inaugural single malt whisky, The Whiskymaker’s Reserve, in 2019. Its first product was The Lakes Gin, a mid-priced gin that uses ingredients from the Cumbrian countryside.

On its website, the company says it sells in 14 countries, including the US and France.