SYDNEY, AUSTRALIA: Treasury Wine Estates Limited (ASX:TWE) has reached an agreement to acquire Frank Family Vineyards (FFV) in the United States at a transaction value of $315 million, a news release noted.
Frank Family Vineyards (FFV) is a highly-acclaimed luxury wine business based in the Napa Valley, California, with a long-term track record of delivering strong revenue and EBITS growth in addition to EBITS margins in the range of 35-40%.
The FFV portfolio is highly complementary to Treasury Americas, filling a key portfolio gap for luxury chardonnay, and Treasury Americas is well placed to enhance FFV’s growth given its leading luxury sales credentials, national distribution network and Californian asset base and sourcing model.
The acquisition is expected to be completed in December 2021, with a commitment to genuine ongoing involvement in the Treasury Americas business by FFV’s founders Rich and Leslie Frank.
Treasury Wine Estates (TWE) has substantially completed its program to divest non-priority US portfolio brands and assets, with total net cash proceeds of approximately A$300 million now confirmed.
Tim Ford, Chief Executive Officer of TWE, commented: “The acquisition of Frank Family Vineyards represents an outstanding complementary addition to the Treasury Americas brand portfolio and is another important step towards our ambition of becoming the premium wine market leader in the Americas.
“This is a rare opportunity to acquire a luxury brand and portfolio of wines that consumers enjoy and connect with. This business has a proud and consistent history and proven track record of success, having been expertly built and led by Leslie and Rich. Together with them, we are excited by the future potential that will be unlocked by the strengths of the Treasury Americas luxury wine platforms.
“We also look forward to welcoming the broader Frank Family Vineyards team to Treasury Wine Estates (TWE), including their significant expertise and experience. This is a compelling strategic and financial investment, comfortably meeting our investment criteria and one we expect will deliver attractive growth and financial returns for TWE’s shareholders over the long-term.”
Rich Frank, founder of Frank Family Vineyards added “Leslie and I look forward to continuing to be a part of the next chapter of Frank Family Vineyards, a business we have spent nearly three decades cultivating into a beloved luxury wine brand.
We have prided ourselves on creating a family atmosphere among our staff and our guests and know this legacy will carry on. We, along with our team, are excited to remain actively involved with Frank Family, while also taking on new leadership roles with Treasury Americas.”
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