April 29, 2021

By Lynda Kiernan, Global AgInvesting Media

Wasatch is investing $100 million in Bespoke Capital Acquisition Corp (BCAC), a special purpose acquisition corporation (SPAC) soon to be acquiring Vintage Wine Estates (VWE) – one of the fastest growing U.S. wine producers with wineries throughout Napa, Sonoma, California’s Central Coast, Oregon, and the state of Washington. 

This investment in the combined BCAC-VWE positions Wasatch as a cornerstone institutional investor in the venture, and brings Wasatch’s total investment in the company to $128 million.

It was in February 2021 when BCAC announced a definitive agreement to combine with Vintage Wine Estates to form a company that will carry forward under the same Vintage Wine Estates name. At this point, Wasatch made its first investment of $28 million in the combined company. 

Seen as an alternative to a traditional IPO, SPACs became more mainstream last year as blank-check entities that would use proceeds from their IPO to buy a private company for the purpose of bringing it public. Prior to this merger, Wasatch Global Investors acquired a stake in Vintage Wine Estates from existing investors valued at $28 million. 

Founded 20 years ago, VWE is a high-growth U.S. wine producer that has scaled and grown organically through more than 20 acquisitions, growing its portfolio to include more than 50 brands ranging from $10-$150 at retail, with the majority priced between $12-$20, and sales volumes of nearly 2 million nine-liter equivalent cases per year.

The company has also built a balanced omni-channel strategy that encompasses direct-to-consumer, wholesale, and exclusive brands arrangements with national retailers that has resulted in a stable platform that has been profitable every year since inception, posting 20 percent-plus average annual revenue and EBITDA since 2010.

“After evaluating over 100 companies, we are delighted to have identified VWE as the ideal merger partner,” said Paul Walsh, executive chairman, BCAC in February. “The company represents a unique and compelling investment opportunity in the consumer staples space.”

Throughout the process, Reed Smith is acting as legal counsel to Cowen and Company – the placement agent working on behalf of Bespoke via a team consisting of Tadashi Okamoto, Ari Edelman, and Marc Hauser.

The capital gained through this investment will support VWE’s acquisition strategy. Having already successfully acquired 20 wineries over the past 10 years, VWE believes that the conditions present in the  U.S. wine industry make it an increasingly positive opportunity for synergistic acquisitions.

Compared to other wine consumption markets, the U.S.’s highly-fragmented $45 billion wine industry is seen by VWE to hold untapped potential for growth, which the company has positioned itself to capitalize upon with expanded production capacity to 15 million cases per year, a high-speed bottling investment, and new warehouses and distribution centers for long-term margin expansion. 

“We are excited to partner with BCAC and transition VWE to be a public company,” said Pat Roney, founder and CEO, VWE. “Our advantaged scale within a highly fragmented wine industry, industry-leading DTC platform that positions us well in a post-COVID consumer world and premium brand portfolio provide a strong foundation to build upon and sustain robust long-term growth.”

This merger is expected to allow VWE to continue and accelerate its proven growth strategy under the name Vintage Wine Estates, which will be led by Pat Roney as CEO, along with the VWE management team that will be joined by Paul Walsh, former Diageo CEO, who will assume the role of executive chairman, and BCAC partners Rob Berner and Mark Harms, who will join the VWE board as non-executive directors. Additionally, the newly combined company will have a strong roster of independent directors that includes wine industry executives and finance and legal executives with experience and a focus on ESG and diversity.

– Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Oilseed & Grain News. She can be reached at lkiernan@globalaginvesting.com.