Central European Distribution Corporation Signs Heads of Terms to Invest in the Whitehall...

Central European Distribution Corporation Signs Heads of Terms to Invest in
the Whitehall Group, a Leading Wine and Spirit Importer in Russia

BALA CYNWYD, Pa., Feb. 26 /PRNewswire-FirstCall/ -- Central European
Distribution Corporation (Nasdaq: CEDC) today announced that it has signed
Heads of Terms, outlining the main terms on which CEDC would invest in the
Whitehall Group in Russia.
The Whitehall Group is one of the leading importers and distributors of
premium wines and spirits in Russia, with projected distribution volumes for
2008 in excess of 1.2 million 9 liter cases and forecasted 2008 net revenues
in excess of $200 million.
The Whitehall Group is the exclusive importer for many leading wine
companies, including, among others, Concha y Toro and Constellation Brands as
well as certain Gruppo Campari brands. The Whitehall Group also imports and
distributes on an exclusive basis brands such as Hennessy, Dom Perignon, Moet
& Chandon and Veuve Clicquot among other brands from the Moet Hennessy
portfolio. In addition to its import activities, the Whitehall Group has
extensive distribution coverage with its own distribution centers in Moscow,
Saint Petersburg, Rostov and Siberia as well as an upscale wine and spirit
retail network in Moscow.
Subject to the execution of a definitive agreement, CEDC proposes to
acquire a 49.9% voting stake and a 75% economic interest in the Whitehall
Group at closing, with an option to acquire, subject to certain conditions,
the remaining interests in the Whitehall Group no earlier than December 31,
2013. The Whitehall Group will continue to be led by its founder and CEO Mr.
Mark Kaouffman, who will retain voting and management control over the entire
Whitehall Group. The proposed investment is subject to satisfactory
confirmatory due diligence; the negotiation and execution of a definitive
acquisition agreement subject to customary closing conditions, including anti-
trust approval, if required; and approval by the CEDC board. The investment
is expected to close within the next 2 to 4 months and will be financed
through a combination of cash, debt and equity.
William Carey, President and CEO, commented: "We believe this to be an
excellent opportunity for CEDC's continued expansion into Russia. The
premiumization trend in Russia for purchasing luxury brands continues to
develop at a strong pace. The strong market position of Whitehall will allow
the company to take advantage of the growing prosperity in Russia. Mark
Kaouffman has built an extremely strong business and we look forward to his
continued leadership of Whitehall after our investment."
William Carey continued, "The Whitehall Group has advised us that it has
forecasted 2008 annual net revenues of approximately $200 million, an increase
of approximately 15%-20% over 2007 annual net revenues. On the basis of these
2008 forecasts, we would expect our investment, if completed, to be accretive
to fully diluted earnings per share by $0.35 to $0.45 on an annualized basis."
Mark Kaouffman, CEO of Whitehall, commented: "We are delighted that CEDC
has decided to invest in Whitehall. William Carey and his team have built a
true success-story and their expertise in the wine and spirit distribution
business in Eastern Europe is unique. We are confident that their
contributions should enhance further our own success to the benefit of all
shareholders and partners of our Group."
BNP Paribas is acting as financial advisor to CEDC. Rothschild is acting
as financial advisor to the Whitehall Group.
CEDC is the largest vodka producer in Poland and produces the Absolwent,
Zubrowka, Bols and Soplica brands, among others. CEDC currently exports
Zubrowka to many markets around the world. CEDC also produces and distributes
Royal Vodka, the number one selling vodka in Hungary.
CEDC also is the leading distributor and the leading importer of alcoholic
beverages in Poland and Hungary. In Poland, CEDC operates 17 distribution
centers and 87 satellite branches and imports many of the world's leading
brands, including brands such as, Jagermeister, Metaxa, Jim Beam, Sauza
Tequila, Grant's, E&J Gallo, Sutter Home, Torres, Remy Martin, Penfolds and
Concha y Toro wines, Corona, Foster's, and Guinness Stout beers and Evian.
This press release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995 including, without
limitation, statements relating to our proposed acquisition of an interest in
the Whitehall Group and forecasts regarding the Whitehall Group's 2008
distribution volumes and net revenues. Forward-looking statements involve
known and unknown risks and uncertainties that may cause the actual results,
performance or achievements of CEDC to be materially different from any future
results, performance or achievements expressed or implied by forward-looking
statements. Investors are cautioned that forward-looking statements are not
guarantees of future performance and that undue reliance should not be placed
on such statements. Our potential investment in the Whitehall Group is subject
to a number of contingencies some of which are described above. We can not
assure you as to when or whether, or on what terms, we will consummate an
investment in the Whitehall Group. CEDC undertakes no obligation to publicly
update or revise any forward-looking statements or to make any other forward-
looking statements, whether as a result of new information, future events or
otherwise unless required to do so by the securities laws. Investors are
referred to the full discussion of risks and uncertainties included in CEDC's
Form 10-K for the fiscal year ended December 31, 2006, and in other documents
filed by CEDC with the Securities and Exchange Commission.
Contact:
James Archbold
Investor Relations Officer
Central European Distribution Corporation
610-660-7817

SOURCE Central European Distribution Corporation

James Archbold, Investor Relations Officer of Central European Distribution
Corporation, +1-610-660-7817