Private equity-owned Accolade Wines is buying premium wine business Fine Wine Partners (FWP) from Lion in a deal said to be worth $100 million.
The acquisition, at a price which hasn’t been revealed, brings a number of Australia’s most famous premium wine brands, including Petaluma, into the Accolade fold.
FWP is also the agent for the family-owned Henschke, famous for Hill of Grace, the cult Yarra Valley winery Oakridge, as well as Bollinger and Ayala champagnes. The deal does not include Lion’s New Zealand assets, which include Wither Hills and the sparkling Te Hana.
Lion will retain its US and NZ wine businesses, the company said, because of their importance for the New Zealand domestic business and plans to bolster their international market presence.
The sale includes FWP’s four Australian wineries, Petaluma/Croser in the Adelaide Hills, St Hallett in the Barossa, Knappstein in the Clare Valley and Stonier on the Mornington Peninsula, including the vineyards, as well as the wholly-owned Tatachilla brand. The on-and-off-premise distribution network of 20 agency partners, including Pikes, Henschke, and Phillip Shaw is also part of the deal. The sale price and specific terms and conditions are confidential. The transition will take six months.
Fine Wine Partners has around 3.7% of the Australian premium wine segment, dealing with around 1.3 million cases of wine annually. Founded by chairman Rob Hirst and his late wife, Judy, in 2005, FWP also runs the Australia’s Wine List of the Year awards, in conjunction with Gourmet Traveller Wine.
Lion CEO Stuart Irvine said the company decided to offload FWP after a strategic review that revealed a large investment was needed to bring it up to scale.
“Lion has a range of competing opportunities for investment in its core categories of beer and cider and has been unable to prioritise the investment required to grow Fine Wine Partners to a size justifying its fixed cost base,” he said.
“With the improvement in market conditions we have come to the decision that this is the right time to realise a fair price for the business.”
Accolade is owned by CHAMP Private Equity, which has been looking at a potential IPO for the business in 2017, valued at up to $1 billion. CHAMP acquired 80% of the business from Constellation Brands, in 2011 for less than $300 million.
Since then, the South Australian-based business has enjoyed a major turnaround, investing heavily in a bottling plant in Bristol, England, as well as announcing earlier this month that Accolade would spend $40 million on a new glass bottling plant and packaging facilities at the Berri winery in South Australia’s Riverland region as it targets the burgeoning Asian market.
Accolade’s brands include Hardys, Western Australia’s Houghton, the Tasmanian premium sparkling wine Arras, Leasingham and cask products such as Banrock Station, Stanley and Berri Estates.
It is Australia’s second-largest wine business, with 45 brands globally, and the world’s fifth largest wine company by volume, producing around 38 million cases annually, distributed to 140 countries.
Accolade deputy CEO Michael East said the expanded premium offering is a response to a shift in consumer preferences for quality wine.
“These brands, from Australia’s most renowned wine regions, represent a very exciting acquisition for Accolade Wines as we further enhance our premium wine credentials and portfolio,” he said.
“Over the last five years, we have experienced significant growth and expanded our global footprint through the acquisition of Geyser Peak in the United States, Grant Burge Wines in Australia, Mud House in New Zealand and Vina Anakena in Chile”.
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