Treasury Wine Estates (TWE) has agreed to acquire California-based Daou Vineyards and its associates, for $1.4 billion, expected to be completed by the end of FY23.
The acquisition, which is set to fill a key Treasury Americas portfolio gap, also involves an additional earn-out of up to $156.9 million conditional on certain net sales revenue (NSR) targets deliver growth in excess of pre-agreed thresholds from FY25 to FY27.
Daou Vineyards will boost the ASX-listed winemaker’s luxury-led portfolio and provide a scale to support a future standalone Treasury Americas Luxury division.
“In Treasury Wine Estates, we have found a partner that not only understands the value of our brand and the premium assets we have cultivated but also the importance of ensuring that we maintain a relentless focus on quality and craftsmanship as we step into our future,” said Daou Vineyards founders Georges and Daniel Daou.
Upon completion, the companies expect the luxury portfolio NSR contribution to increase to 53 per cent of Treasury Americas and 49 per cent of the TWE Group.
“We continue to see strong long-term growth trends for luxury wine in TWE’s key global markets, with a significant value-creation opportunity leveraging and building on the strengths today of TWE, Penfolds, Treasury Americas and DAOU to create a multi-brand global luxury wine business of scale,” said Tim Ford, CEO at TWE.
The acquisition will be funded through $825 million equity raising, $157 million placement of TWE shares to the existing owners of Daou, and a $550 million debt facility.
