February 8, 2021

By Lynda Kiernan, Global AgInvesting Media

The loss in tourism dollars due to the pandemic has hit California’s winemakers particularly hard. Some have turned to solutions such as virtual tours and tastings, and some have chosen another course.

Vintage Wine Estates (VWE), a rapidly-growing company with 12 estates in Napa, Sonoma, California’s central coast region, Oregon, and Washington, and a robust direct-to-customer platform, has merged with special purpose acquisition company (SPAC) Bespoke Capital Acquisition Corp (BCAC) for the purpose of bringing Vintage Wine Estates public at an enterprise value of $690 million. 

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 the merger Wasatch Global Investors acquired a stake in Vintage Wine Estates from existing investors valued at $28 million. AGR Partners acquired a minority stake in VWE in 2018, however it is not known if AGR exited VWE through this deal. 

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. “The company represents a unique and compelling investment opportunity in the consumer staples space.”

“VWE’s well-diversified portfolio of high-quality brands spanning all price points and differentiated omni-channel marketing approach bring great balance. In addition, the company has a deeply experienced management team with a strong track record of synergistic deal-making, which, on top of impressive organic growth, should continue and will help drive profitable growth as well as enhance shareholder value over the long term.”

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 which 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, and HighQuest Group’s Oilseed & Grain News. She is also a contributor to the GAI Gazette. She can be reached at lkiernan@globalaginvesting.com.