FRIDAY INTERVIEW:John Teeling, chairman of Cooley Distillery
IN THE words of Mark Twain, Irish entrepreneur John Teeling is all in favour of progress but doesn’t like change. Given the change taking place around Teeling at present, the quote is timely.
Last week, he agreed to sell his Irish whiskey maker Cooley Distillery to Illinois-based Beam for a tidy $95 million (€72.8 million) after 24 years.
And, over the holidays, his cramped, JFK-era office at 162 Clontarf Road will get a makeover.
“These have been here since ’69,” he says to me as I wrestle with a set of blinds in an attempt to block out the sun. We’re getting new ones over Christmas. Ones that come down. They’ll be great for when you come back again.”
He’s also protective of a large, stainless steel tea pot on his desk.
“I’ve had it since 1972. Somebody took it this morning and there was war. War.”
Teeling has a witty turn of phrase to match his intelligence. Yet there’s no masking his mixed feelings about selling Cooley.
At $8.25 a share, Beam’s offer is a good deal for Cooley’s 290 shareholders, many of whom backed Teeling from its start in 1987. Beam has the firepower to put Cooley on the map.
“Cooley needs to play on the world stage. Good and all that we are here in 162, little Irish companies can’t compete with multinationals,” he says leaning back in his swivel chair.
“All over the world people are now drinking Irish whiskey . . . because it’s sweeter. Cooley needs a huge amount of money to take advantage of the opportunity. It will need, over the next 10 years, about €50 million in fixed investment, starting now.”
He reckons Cooley can triple in size within a decade under Beam’s stewardship.
“We could have done that. We were generating the cash flow. In the last few years, we’ve invested €9 million in new facilities. But we were going to have to start all over again on the first of January – new warehouses, new bottling halls, new columns. We’re good at that but where we’re weak is that we have no marketing money.”
Teeling expects Beam to spend $9 million on Cooley’s Kilbeggan brand alone in the US next year. It’s the kind of financial backing that he couldn’t muster as an independent. Yet it’s a short measure compared with the $40 million or so that Pernod Ricard spends promoting Jameson in the US.
Teeling did try to put together a management buyout this year – Cooley is an unlisted public company. “I couldn’t get the money,” he admits. “Once Beam came on the scene I was dead in the water.”
Beam is paying about 50 per cent more than Teeling could have put on the table.
The Cooley story has ended well for Teeling but it wasn’t always so sweet smelling. In 1991, Teeling’s bankers called him while he was in Namibia and gave him 24 hours to sort out his loans.
“It was terrible stuff. We hadn’t distilled for two years. We had no money. I didn’t make the deadline but they held off.”
In 1993, a sale to Irish Distillers was blocked by the Competition Authority.
Teeling describes Beam as a “powerful whiskey company” – and not just because it’s the fourth biggest spirits brand in the world with $2.7 billion in annual sales.
“They’re not known in Ireland but if you are in America and you drink Bourbon, you drink Jim Beam,” he explains.
“In the States, Beam would be stronger than Pernod so they think they can take on Jameson there. That’s a big ask. But they’re not afraid.”
Irish whiskey is on a hot streak at present. Sales globally grew by 11.5 per cent last year. Cooley hasn’t been left behind. Teeling says sales this year will be up by 68 per cent while profits will rise to €4.2 million from last year’s €2.5 million.
“At that rate of growth, we’d run out of whiskey before we could distil enough,” he says.
Teeling’s life story is about more than whiskey, of course. His father was a door-to-door insurance salesman, who died when he was only a teen. “I took that over at 14. So I’m 51 years a director of a public company.”
He gained a scholarship from St Joseph’s boys school to UCD where he studied for a BComm.
He subsequently did an MBA in Wharton and a doctorate in Harvard. “I was a very good student. I had an ability to concentrate, nothing else.” He subsequently became a commerce lecturer in UCD.
In the 1970s, Teeling established himself as a company restructuring/break-up specialist.
He founded Cooley in 1987 and has been prospecting in the deserts and hills of far flung places for about four decades now in search of diamonds, zinc, oil and gold, setting up more than 20 companies during his career.
Not all his ventures have worked out. In 1993, he sold his stake in a listed shell company called CountyGlen to an offshore entity called Wyndham Trading. CountyGlen became mired in controversy and a High Court inspector investigated its affairs.
The inspector concluded that a businessman called John Carway was the beneficial owner of Wyndham and had engineered the takeover of CountyGlen with the company’s own money and distributed its remaining assets for his own benefit.
The inspector’s report found that Teeling was “open to some criticism for failure to exercise due care as an outgoing director”.
“I felt awful about that,” Teeling says. “Six hundred of my friends lost money on CountyGlen.”
He is a promoter of Petrel Resources, which looked set to make a fortune from oil contracts in Iraq following the demise of Saddam Hussein. “We got screwed,” is how Teeling sums it up.
In Iran, Persian Gold secured “good” licences but the company has since been frozen out. “They decided we had lied to them and that we weren’t Irish, we were English because we were listed on the London Stock Exchange. We’ve never recovered from that.”
Teeling travels around Africa and the Middle East has not been without risk.
“We thought we were going to be kidnapped in Yemen because there was a block on the road. But we didn’t stop to ask them,” he recalls.
Another time, a young soldier in Iraq mistook him for a spy at a checkpoint. “When he went to get his sergeant we made a decision to do a runner.”
He’s also dodged arrest in Zimbabwe. “If they want to take one of your assets, the easiest thing to do is throw you into jail until you agree to sign it over.”
How did he avoid arrest? “I disappeared. Rapidly.”
What motivates him to do this? “I don’t know how to answer that. It’s never bothered me. The only place I’ve been physically threatened was in Gorey. We have gold licences there and a farmer said he’d stick a knife in my chest if I went onto his land.”
The idea for Cooley came to him in 1970 when he was studying at Harvard. “My interest was, and still is, in trying to find sustainable economic development policies for a little island.”
What might Teeling now turn his attention to?
“Waste from an abattoir,” he says quick as a flash. “The offal . . . we could make nutraceuticals out of it. Fat is the building block of life and we throw it down the drain.”
He believes the euro will “break” next year. About a year ago, he put his money into either sterling or dollar investments. “And you will notice this deal is done in dollars. The board decided we would take dollars,” he says with a knowing wink at me.
Teeling turns 66 next month, when he will get the State pension and his free bus pass. “I’ve never been on a bus. But I like trains.”
Around the same time, he will bank about $16.5 million from the sale of Cooley.
How much is he worth? “I’ve done alright. Will you leave me alone.”
While he might be close to the official retirement age, Teeling has no plans to put his feet up. “The money’s not important to me. It’s the game that’s important. It’s all about the hunt.”
ON THE RECORD
Name:John Teeling
Job: Chairman Cooley Distillery
Why in the News?Has agreed to sell Cooley for $95 million to Beam
Family:Married with two sons and a daughter
Lives:Clontarf
Hobbies:Rugby and cricket
Something you might expect:He's a member of Clontarf rugby club.
Something that might surprise:"I like Gilbert and Sullivan."
