Codorníu Raventós sells majority stake to The Carlyle Group

Friday, 29. June 2018 - 12:15

Spanish cava and wine producer Codorniu has agreed to sell a majority stake of its company to US capital investment group The Carlyle Group, for a total of €390m ($454m), a sum which includes paying off €90m of Codorniu’s debts. 

A spokesman for The Carlyle Group in Madrid confirmed the acquisition agreement but said talks were continuing over the percentage share of the takeover of Codorniu, which is subject to regulatory approvals.“The agreement is a majority takeover, but we do not know yet if the majority stake will be 55% or 60% or even 70% of Codorniu,” he told Meininger’s.  Meanwhile, Codorniu said the transaction was “expected to close at the end of the year subject to confirmatory due diligence and regulatory approvals.”

In a statement issued by Codorniu, Mar Raventós, current chair of Codorníu said: “This agreement will help boost the company overseas and consolidate and give continuity to our strategy centered on building valuable and prestigious brands.” 

The Carlyle Group’s acquisition agreement of Codorniu comes after the company had failed to attract a minority shareholder to the company.

In May, Codorniu said it had rejected The Carlyle Group’s initial takeover bid as the company’s 216 family shareholders were deeply divided over the sale of the company. But having been unable to find a minority investor since then, key Codorniu shareholders finally decided to sell the company once The Carlyle Group had raised the amount of their bid, Barcelona daily newspaper, La Vanguardia said. 

Both La Vanguardia and Spanish business daily newspaper, Expansion said The Carlyle Group had twice had to raise their bid for Codorniu after proposing a initial €240m bid.
According to reports in Spain The Carlyle Group is set to sell off some of Codorniu’s assets to finance further acquisitions in Europe.

Codorníu owns 10 vineyards in Catalonia, Spain, in the US and in Argentina with a total of 3,000 ha. 

As well as making its own cava, it owns wine brands Raimat, Masia Bach, Scala Dei (Priorat), Abadia de Poblet, Legaris (Ribera del Duero), Bodegas Bilbaínas (Rioja), Nubiana (Cinca) as well as the Séptima Malbec brand in Argentina and the Artesa brand in California.

However, growth stagnation at Codorniu in recent years has, according to La Vanguardia newspaper, affected dividend payouts to shareholders.

A company restructure was initiated last year, involving a new orientation towards premiumisation, including the phase-out of its production of unbranded cava for supermarkets. This led to the loss of 71 jobs and consumed profits up to June 2017. Until that date, Codorníu’s reported an Ebitda of €16m ($19.8m) and turnover of €236m, only slightly higher than the €211m registered in 2003.

But Codorniu today said in a statement today that the company expects to close its fiscal year with an EBITDA of €26m.

The takeover agreement comes as consumers increasingly turn to sparkling wines. With fives centuries of history, Codorniu has until the sale agreement, been the oldest family-owned cava-producer in Spain.

The Carlyle Group, a US private equity company, has been on a wine acquisition spree recently. Earlier this month, they announced the closure of their acquisition of Accolade Wines, one of the world's biggest wine companies.
Barnaby Eales