Premier luxury wine maker Duckhorn Portfolio said it would be taken private by Butterfly Equity in an all-cash deal worth $1.95 billion.
Private equity firm Butterfly will pay Duckhorn stockholders $11.10 per share, representing a premium of about 106% to the wine maker's last close on Friday (4 October).
Shares of Duckhorn were up more than 100% at $10.89 in early trading.
The transaction, which was unanimously approved by the Duckhorn board, is expected to close this winter and subject to regulatory approval.
Deal Highlights
Duckhorn's board will have the right to terminate the agreement and enter into a better proposal from third parties during the 45-day 'go-shop' period, expiring on 20 November, the company said.
The St. Helena, California-based company, was established in 1976 and has a curated portfolio of premium brands, including Duckhorn Vineyards, Decoy, Sonoma-Cutrer and Kosta Browne.
The company's fourth-quarter sales grew 7.3% from a year earlier but its gross profit margin declined 740 basis points to 47.8%.
J.P. Morgan Securities is acting as financial advisor to Duckhorn, while KKR Capital Markets is acting as capital markets advisor to Butterfly.
'An Incredible Opportunity'
Adam Waglay, co-founder and co-CEO of Butterfly stated, “This is an incredible opportunity, and we look forward to bringing our specialised expertise and deep food and beverage network to bear to help amplify and accelerate the company’s mission to have their wine poured wherever fine wines are served throughout North America and the world.”
Vishal Patel, partner at Butterfly added, “As a leading pure-play luxury wine producer, Duckhorn has, in our view, the best portfolio and strongest fundamentals in the industry.
“We believe the company’s curated suite of luxury wine brands, structurally advantaged business model, and world-class team have laid the foundation for a powerful, scalable platform, which will continue to drive growth both organically and through strategic acquisitions.”
News by Reuters, additional reporting by ESM.
