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The Duckhorn Portfolio to be acquired by Butterfly
Private equity firm Butterfly has entered into an agreement to acquire Californian company The Duckhorn Portfolio in a US$1.95 billion deal.
Los Angeles-based Butterfly Equity has entered into a definitive agreement to acquire The Duckhorn Portfolio in an all-cash transaction valued at US$1.95 billion.
The deal includes Duckhorn brands Decoy, Sonoma-Cutrer, Kosta Browne and Duckhorn Vineyards, and will see Butterfly take a firmer standing in the food and beverage industry, in which it specialises.
Following the completion of the transaction, Duckhorn will become a privately held company. And as part of the agreement, Duckhorn stockholders will receive US$11.10 per share in cash.
Strongest fundamentals
Vishal Patel, a partner in Butterfly Equity, called Duckhorn a “leading pure-play luxury wine producer”and asserted that “Duckhorn has, in our view, the best portfolio and strongest fundamentals in the industry.”
Continuing, Patel said that Duckhorn’s “curated suite of luxury wine brands, structurally advantaged business model, and world-class team have laid the foundation for a powerful, scalable platform, which will continue to drive growth both organically and through strategic acquisitions.”
Butterfly Equity invests in ‘seed-to-fork’ American businesses with a portfolio that includes Milk Specialties Global, Chosen Foods, MaryRuth Organics, Orgain, Bolthouse Fresh Foods and QDOBA, among others.
“This announcement is excellent news for the future of our Company and for stockholders of The Duckhorn Portfolio, who will receive a substantial premium,” said Deirdre Mahlan, Duckhorn president, CEO and chairperson.
“Based on our long history of success and innovation, and our position as one of America’s most successful luxury wine companies, Butterfly believes strongly in The Duckhorn Portfolio and is fully invested in helping us achieve our next phase of growth.
“Just as important, Butterfly brings a proven track record of strengthening its portfolio companies while helping them advance their long-term strategic objectives. Through our partnership with Butterfly, we expect The Duckhorn Portfolio will have enhanced resources to build on our strong foundation and to further scale our operations. We are excited to work with the Butterfly team to begin writing an exciting new chapter in the story of The Duckhorn Portfolio.”
Q2 results
Duckhorn’s latest financial results saw its sales up 7.3% year on year to a total of US$107.4 million, surpassing Wall Street’s estimates by 2.5%. Anaylsts expect Duckhorn’s sales to grow a further 18.8% over the next 12 months.
“We are pleased to conclude fiscal 2024 with a solid fourth quarter performance,” said Mahlan.
Stock traded up 101% to US$10.86 immediately after the news of the Butterfly acquisition broke.
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