New Hardys owner to invest
The new owner of the Hardys and Stowells wine brands has pledged investment to grow the business.
Sydney-based Champ Private Equity is paying A$290 million for the Australian and UK wine businesses of American giant Constellation Brands.
The deal is expected to be completed by the end of January and, as well as the brands, includes related wineries and vineyards, the company’s UK facilities and its half-share in the wholesaler Matthew Clark.
It will also include the South African wine brands Kumala and Fish Hoek.
Constellation will retain a 20% stake in the business.
The deal ends a long-running saga over the future of the Constellation UK and Australia businesses.
Earlier talks about a merger with McGuigan wine firm Australian Vintage ended in April 2010.
The sale to Champ sees the wine businesses join an investment portfolio that includes companies in food, healthcare, mining, printing and energy.
Managing director John Haddock said: “Champ is committed to supporting [the] management in building a competitive and profitable business in the Australian and UK markets and will invest to grow the business.”?Constellation said it remained “committed to growing its international businesses and continuing to invest in and drive its premium portfolio around the world”.
Brands in the remaining Constellation portfolio include Robert Mondavi and Clos du Bois from the US, and New Zealand’s Kim Crawford.
Chief executive Rob Sands said: “During the past two years, Constellation has implemented a strategy focused on driving profitable organic growth through premiumising its world-class brand portfolio and improving margins, return on invested capital and free cash flow.
“Constellation Wines Australia & Europe sells quality wines from the important Australian appellation and has significant scale, but continues to be faced with challenging market conditions. The business is no longer consistent with Constellation’s strategy.
“We believe Champ has the requisite skills and motivation necessary for accelerating the success of the Constellation Wines Australia & Europe group.”?Constellation indicated that the company would work with Champ to distribute each other’s wine brands globally.