Vintage Wine Estates SPAC Offers Discounts and VIP Treatment by

By Christiana Sciaudone – PSPC has received a lot of criticism lately, but, at the very least, this one comes with a wine discount.

Vintage Wine Estates, also known as VWE, is on the verge of completing a reverse merger with a specialist acquisition company. Customized capital acquisition Corp (NASDAQ 🙂 in an almost $ 700 million deal. And for those who wish to bet on the company, it offers a passport to shareholders who will get discounts on purchases, as well as VIP treatment at its 14 wineries. Not a bad deal for the wine lovers among us.

The 20-year-old American winemaker is an aggressive acquirer, having closed more than 20 deals in the past decade, with plans to spend some $ 350 million of his new funding on both new purchases and innovation. . VWE, which sells over 50 brands, mostly in the premium segment above $ 10, has been profitable every year since its inception.

“We are very different from a lot of SPACS,” said Paul Walsh, executive chairman of Bespoke and former Diageo (LON 🙂 CEO. Walsh, who spoke on a conference call alongside VWE CEO Pat Roney last week, will become non-executive chairman of the combined company. “You have a real management team today, with a real track record of selling real products for real money. We are generating real money now. You don’t have to speculate on the multiple in 2025, you can watch Today. “

This year’s number – over 300 – has already surpassed last year’s figure of 248, according to SPAC Research, which tracks the market. The wave has caught the attention of regulators.

“Concerns include the risks associated with fees, conflicts and sponsor compensation, celebrity sponsorship and the potential for retail participation attracted by baseless hype, and the sheer amount of paid-up capital in PSPC, each. being designed to seek out a private target to be made public, ”wrote John Coates, acting director of corporate finance at the Securities and Exchange Commission, in an April 8 statement.

Forward-looking information provided by PSPC targets “may also be untested, speculative, misleading or even fraudulent,” Coates said.

This does not appear to be the case with VWE, which, despite having big plans, has seen its average revenue exceed 20% growth every year since 2010, the company said in a statement.

Strong results continued throughout the pandemic, which the company attributes to its three-pronged approach, with 33% of business coming from B2B transactions with Costco (NASDAQ 🙂 and Amazon (NASDAQ :), 38% wholesale traditional and 29% of direct-to-consumer sales, the company said in a presentation, citing data as of June 30.

“We are very well diversified, which has allowed us to grow during the pandemic,” Walsh said. Direct-to-consumer sales, in particular, have been very successful and should continue to be.

Bespoke reviewed a hundred companies, and the maker of the Layer Cake brand was operating in the most attractive segment, with 99% of their wines over $ 10, Walsh said. The premium wine and fine wine segments have shown the strongest long-term growth, at around 6% per year, VWE said.

In addition, the per capita wine consumption in the United States is 15.2 gallons per person compared to 25 to over 50 gallons per person for France, Italy and the United Kingdom, which leaves plenty of room for the growth. And then there is a very fragmented market of small wineries in the United States ready to sell.

The company will focus on acquisition opportunities within a two-hour flight from headquarters to Santa Rosa, California, including Oregon and Washington, and with a focus on the $ 10 and up category. There are more than 10,000 wineries in the United States, of which about 4,000 are independent – and about 50% of them have indicated they could sell, the company said.

“There are a lot of wineries, but a lot of them are very, very small,” Walsh said. “In a world where wholesalers consolidate, retailers consolidate, these small players will find it quite difficult. We provide safe shelter for their valuable assets.

While the market may seem crowded with wine brands, Walsh points out that VWE is one of the largest wineries in the United States and only holds a 1.5% stake.

“For us to make 2-3 acquisitions per year, we will always have a very strong pipeline,” said CEO Roney.

VWE will also diversify, probably into hard cider and low-alcohol, non-alcoholic wines. A cannabis-infused drink awaits federal legalization behind the scenes.

“We think we’re off to the races,” Walsh said.

About Michael Brafford

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