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wine businesses

Sonoma County’s Vintage Wine Estates plans Eastern US expansion with Ohio acquisition

in People

Vintage Wine Estates, a locally based group of California and Pacific Northwest brands such as B.R. Cohn and Ace Cider, on Tuesday said it acquired a 120-year-old Midwest contract winery, brewery and distillery, with plans to make it an Eastern U.S. hub for production of ready-to-drink adult beverage mixes and cider.

The Santa Rosa-based company (Nasdaq: VWE) acquired Meier’s Beverage Group (Meier’s Wine Cellars Inc.) in the Cincinnati suburb of Silverton, Ohio, for $25 million split equally in cash and stock, according to the announcement and a regulatory filing. The deal also includes a $10 million earn-out clause if Meier’s pro forma earnings top current levels in the next three years.

The purchase price was valued at about eight times Meier’s 2021 adjusted earnings before interest, tax, depreciation and amortization, according to the news release.

Started in the late 1800s, Meier’s is said to be the oldest and largest winery in that state. President Paul Lux will continue to lead the company, according to Vintage. That company produces over 800,000 cases annually from three bottling lines and a beverage canning line.

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California North Coast wine businesses lean on cash amid uncertainty

in News

North Coast vintners and wine grape growers want more clarity about where costs and sales are headed in the months to come, according to bankers that serve the industry.

There’s a mixed bag of indicators. There are promising signs from reopened restaurants and tasting rooms from coronavirus pandemic restrictions, a big start to the rainy season after two years of drought as well as a dramatic turnaround from the grape and wine glut that loomed over the industry before the emergence of the virus.

But then there are disappointing developments such as the rise of more virulent viral strains like delta, a worsening of the labor shortage that predated the pandemic and the forecast for potentially a third year of drought.

As a result, companies have fallen back on the “cash is king” adage of recessionary corporate finance in the past 20 months, according to Rob McMillan, founder of Silicon Valley Bank’s premium wine division.

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