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- Treasury Wine Estates (TWE) has announced plans to buy Frank Family Vineyards for US$240 million (A$330.6 million)
- The US luxury winemaker is based in California’s Napa Valley and primarily produces chardonnay and cabernet sauvignon as well as pinot noir and sparkling wine
- TWE says acquiring the US winemaker will strengthen its position in the North American market and also give it much-needed access to luxury chardonnay products
- The ASX-lister will use debt, cash and proceeds from its recent US$300 million (A$413 million) US asset divestment program to fund the purchase
- Treasury Wine Estates is up 2.89 per cent at $11.58 per share
Treasury Wine Estates (TWE) has announced plans to buy Frank Family Vineyards for US$240 million (A$330.6 million).
The US luxury winemaker has operations in California’s iconic Napa Valley and primarily produces chardonnay and cabernet sauvignon as well as pinot noir and sparkling wine.
The ASX-lister said acquiring Franks Family Vineyards will strengthen Treasury Americas position in the US market.
Additionally, it’ll give the wine business access to luxury chardonnay products which are currently missing from TWE’s portfolio of wines.
The company will use debt, cash and proceeds from its recent US$300 million (A$413 million) US asset divestment program to fund the purchase.
Treasury Wine Estates CEO Tim Ford said acquiring the winemaker had a number of financial benefits, with the business expected to be earnings accretive post-purchase.
“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,” he said.
“We also look forward to welcoming the broader Frank Family Vineyards team to TWE,
including their significant expertise and experience.”
Frank Family Vineyards founder Rich Frank said he and his partner were excited to join the TWE team going forward.
“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,” he said.
TWE expects to have completed the purchase by the end of December while the Frank Family Vineyards founders will join the ASX business on an advisor basis.
Following news of the acquisition, Treasury Wine Estates was trading up 2.89 per cent at $11.58 per share at 2:31 pm AEDT.
