US investors to acquire Australia’s biggest wine business for £547m

US-based private equity house The Carlyle Group is set to acquire the biggest winemaker in Australia for nine figures.

The company confirmed plans to buy Accolade Wines from Champ Private Equity for A$1bn (c.£547m).

Accolade is the business behind wine brands such as Hardys and Echo Falls.

It is Australia’s largest wine producer by volume and fifth worldwide, delivering 38 million cases of wine to 140 countries annually.

Champ, which has offices in Sydney, Brisbane and Singapore, created the company seven years ago by acquiring two separate divisions of Constellation Brands for A$290m.

According to the BBC, Australia’s wine exports to its single biggest market, China, grew 63% to A$848m (£464m) last year.

The country is today the world’s fifth largest exporter of wine, behind Italy (which holds the top spot), France, Spain and the US.

Commenting on the transaction, the managing director of London-based LGB Corporate Finance, Angus Grierson, said: “Carlyle’s purchase of Accolade will help the firm to cash in on demand from China’s burgeoning middle class for western consumer products.”

“The deal will help cement Accolade’s well-established brands in the Asian region, enabling the business to further capitalise on the increasing Chinese middle class demand for wine. The value of wine exports to mainland China grew by 63% in 2017 and if US wines are subjected to higher tariffs when imported into China, it would directly benefit Australian companies, like Accolade, knocking on China’s front door to capitalise on a growing market.”

He continued: “This transaction represents an attractive exit for Champ, taking Accolade from break-even in 2011 to EBIT of $A100m this financial year. The deal follows Champ’s divestment of Matthew Clark in 2015 to the recently embattled Conviviality plc, which generated an estimated 6.0x return.”

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