Casella Family Brands has confirmed it's been approached to sell its wine business, but says the business is not up for sale.
The Australian Financial Review has reported that Casella could be up for grabs as part of a $500 million-plus sale plan.
“Street Talk understands the family-owned Casella Family Brands has hired investment bank UBS to test appetite of potential buyers, including Australian and offshore private equity groups already circling the local wine sector,” the AFR writes.
However, Casella has released a statement saying: “Casella Family Brands has not commenced a sale process for the business.
“There has been strong interest in the sector, driven by the recent sale of Accolade Wines and the rumoured sale of the Pernod Ricard Wine assets, and Casella Family Brands has received a number of approaches over an extended period of time from a range of investors in relation to the Casella Family Brands business.
“The company will continue to invest in the growth of its portfolio of brands including [yellow tail], Peter Lehmann Wines, Brand’s Laira, Morris Wines of Rutherglen and Baileys of Glenrowan.”
Casella Family Brands was founded by the Casella family in 1969. It has 700 employees, buys grapes from more than 500 growers and can produce 36,000 bottles of wine an hour. It is best known for exporting 12.5 million cases of [yellow tail] a year to more than 50 countries
What about Pernod Ricard Winemakers?
Casella’s mention of “the rumoured sale of Pernod Ricard wine assets” follows persistent reports by the AFR and Reuters that Pernod Ricard Winemakers is up for sale.
The company told WBM in May that it "does not comment on market rumours".
“The Group has already mentioned several times that it intends to continue the dynamic management of its portfolio, remaining one of the consolidators of the sector as recalled by our CEO Alexandre Ricard during the H1 financial communication," it noted in a statement.
"In accordance with this strategy, the Group regularly assesses every available opportunity: tactical acquisitions as proved by the recent acquisition of the Italian gin Malfy, or divestment of brands, through one criterion in particular, ie their capacity to create or continue to create value for the business. In this context, any other comment would be mere speculation."
Pernod Ricard recently revealed Jacob's Creek is leading the group's wine portfolio in China.
Jacob’s Creek is enjoying double-digit sales growth in the group’s largest market after the United States. China accounts for around 10% of total group sales, with the company aiming to double the size of the imported spirits market in China to 2% by 2025.
The company's goal is to “educate and recruit new customers” through its luxury, prestige, premium and wine sales channels, Asia CEO Philippe Guettat told an analyst's call earlier this month.
Pernod Ricard Winemakers makes up roughly 5% of group sales.
Among the potential buyers suggested by the AFR for Pernod Ricard Winemakers are The Carlyle Group, which acquired Accolade Wines last year; Treasury Wine Estates, which is “expected to at least take a look”; and private equity firm PAI Partners, which is “understood to have shown an early interest”.
The AFR says Pernod Ricard Winemakers is expected to be worth about $1 billion - which is what Carlyle paid for Accolade early last year.
Analysts however were skeptical according to Drinks Business, arguing that while there may be further sales of non-core brands, a wholesale disposal of the entire wine division is “unlikely”.
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