CHAMP Private Equity is selling Accolade Wines, one of the world’s biggest wine companies, for A$1bn ($770m) to another private equity company, The Carlyle Group in the US.
Carlyle will take both CHAMP’s 80% stake in Accolade along with the remaining 20% owned by Constellation Wines.
Accolade Wines at a glance
Accolade Wines, headquartered in South Australia, was created after CHAMP acquired two separate wine divisions from Constellation in 2011. “The two divisions CHAMP acquired had separate strategies, separate management, operated out of Australia and the UK and were even on separate IT systems,” said CEO John Haddock in a statement. “Firstly, we had to bring the two divisions together to create one business.”
Today, it is the largest producer of Australian wine, exporting A$350m worth of wine to more than 140 countries. Accolade’s portfolio includes wines from South Africa, New Zealand, the USA, Chile and Italy, along with other alcoholic beverages made in the UK. More than two thirds of its earnings come from outside Australia.
“We followed a deliberate strategy of creating a New World wine platform,” said CEO Haddock. He added that the company also moved into premium wines through “the acquisition of Grant Burge Wines and the Fine Wine Partners portfolio, which included brands such as St Hallett, Petaluma and Croser.”
The acquisition of Fine Wine Partners in 2016 reportedly cost $100m. CHAMP also invested in production facilities and has a bottling and distribution centre at Accolade Park in the UK. A new bottling and warehousing facility is due to open at Berri in South Australia next year, to help the company target Asian markets.
Who is the Carlyle Group?
Based in Washington, The Carlyle Group is the world’s largest private equity company. Founded in 1987, it initially focused on businesses related to defence. Today, it works in areas including aerospace, defence, energy, financial services and healthcare, among others. The company does not appear to have specific experience with agriculture or alcohol.
Carlyle’s approach is to bring in new management, and use the data accumulated from across their portfolio, to boost growth.
What does this mean for Accolade?
Carlyle’s aim, according to the Financial Review, is to accelerate Accolade’s growth, particularly in Asian markets. “This is a company with great brands and strong market positions, with multiple growth opportunities, particularly in Asian markets,” the company was quoted as saying. “We look forward to supporting Accolade Wines with Carlyle’s global resources, and investing in business and working with staff, suppliers and customers to drive growth."