Australia’s Treasury Wine Estates to buy DAOU Vineyards for $900 million
2023.10.30 18:57
© Reuters. Bottles of Penfolds Grange, made by Australian wine maker Penfolds and owned by Australia’s Treasury Wine Estates, sit on a shelf for sale at a wine shop in central Sydney, Australia, August 4, 2014. REUTERS/David Gray/File photo
(Reuters) – Australia’s Treasury Wine Estates (OTC:) said on Tuesday it has entered into a deal to buy luxury wine brand DAOU Vineyards based in Paso Robles, California for $900 million in cash.
It could pay an additional $100 million if certain targets are met, Treasury Wine added.
Inclusive of cost synergies of more than $20 million, the acquisition is expected to be mid to high-single-digit earnings per share (EPS) accretive in fiscal 2025, the first year of Treasury Wine owning DAOU.
The company plans on funding the acquisition through an equity raise of A$825 million ($525.53 million).
Treasury Wine, which had a trading halt earlier in the day, also announced an A$157 million placement of new shares in the company will be issued to the existing owners of DAOU.
The company intends to establish $311 million of debt via a new $350 million acquisition bridge facility to expedite funding for the acquisition.
($1 = 1.5699 Australian dollars)
