Treasury Wine Estates has furthered its strategy of premiumising its US wine businesses with the $433 million purchase of Frank Family Vineyards.
The maker of Penfolds wines bought the Napa Valley, California business on an EBITDAS multiple of 13.2, which TWE said was favourable compared to the company’s current luxury wine transactions.
FFV’s portfolio is said to be complementary to Treasury Americas’ and fills a gap for luxury chardonnays, also coming with a national distribution network.
The company sells at price points of between $38 and $225 a bottle, led by chardonnay but also including cabernet sauvignon, pinot noir and sparkling wine.
Treasury has been a divestment path of low margin, commercial brands in the US since China imposed draconian trade sanctions on Australian products, while growing high margin luxury businesses.
The process has been largely completed with the company reaping $300 million from the sell off.
Treasury’s CEO Tim Form said the Frank Family brand was another step in the company’s ambition of becoming the premium wine market leader in the Americas.
Ford said: “This is a rare opportunity to acquire a luxury brand and portfolio of wines that consumers enjoy and connect with.
“Together with them we are excited by the future potential that will be unlocked by the strengths of the Treasury Americas luxury wine platforms.”
Picture: Frank Family Vineyards
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