Treasury Wines Estates has completed its mass divestment from “non-priority” US brands, and has picked up California-based Frank Family Vineyards in an effort to complement its now-smaller selection of American products.
According to the business, the US$315 million acquisition aligns with its new approach to capital allocation in the region, which saw the business replace its low margin, commercial assets with sustainably growing, high margin luxury brands.
“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,” said TWE chief executive Tim Ford.
“This is a rare opportunity to acquire a luxury brand and portfolio of wines that consumers enjoy and connect with.”
The acquisition will be funded partially by the cash generated through divesting from other brands in the market, which brought in A$300 million (US$218m), and makes Treasury Americas a market position of number two in luxury chardonnay priced US$25 and above.
Founded in 1992 by Rich Frank, Frank Family Vineyards comprises a chardonnay-led collection that ranges from US$38 to US$225 per bottle, and has seen revenue increase each year since 2009.