RE:Sorry my posts seemed to have triggered a bunch of spamCaptain The way I see this is $54M is a payment for exclusive rights to represent, market, and sell Pernod products for the next 5 years. Corby receives commissions on the products sold. Considering they received ~$31M in commissions in 2020 and subtracting out $10M annually in costs for this privilege (and cogs and sg&a expense) this presumably leaves a nice chunk of profit to Corby. I do find it interesting that Pernod chose to renew a multi-year agreement (with possible extensions) instead of simply buying out minority shareholders in an acquisition in 2020. Presumably there is some advantage to Pernod to continue on with the existing structure. I for one will be perfectly content with the status quo, as I hold this stock for an income stream.
>>>Under the agreement, as of July 1, 2021, Corby's exclusive right to represent Pernod Ricard's brands in Canada will continue for five years and three months until September 29, 2026, with a potential for automatic renewal for a further three years thereafter, subject to the achievement of performance criteria....Corby anticipates that the transaction will provide continuity and greater assurance with respect to earnings. "This renewal is a testimony of the strong relationship that Corby has had with Pernod Ricard for the last 14 years. We are delighted to continue to represent power brands like Absolut, Jameson and The Glenlivet in Canada," says Nicolas Krantz, recently appointed President and Chief Executive Officer of Corby. By continuing Canadian representation of the Pernod Ricard portfolio of brands, this renewal allows Corby to maintain annual commission income as an important revenue stream (CAN$31.5 million in fiscal year 2020) and will be secured through the payment of an upfront fee of CAN$54.45 million to Pernod Ricard by Corby from cash on hand
https://corby.ca/en/news/article/?id=137344