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Australia's Treasury Wine Estates to buy DAOU Vineyards for $900 million

2023-10-31 06:19
Australia's Treasury Wine Estates said on Tuesday it has entered into a deal to buy luxury wine brand
Australia's Treasury Wine Estates to buy DAOU Vineyards for $900 million

Australia's Treasury Wine Estates 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)

(Reporting by Roushni Nair in Bengaluru; Editing by Shailesh Kuber and Krishna Chandra Eluri)