Castle Brands has acquired premium wine company Betts & Scholl.

The US drinks distributor and marketer said today (22 September) that it has acquired the wine firm, formed in 2003 by partners Richard Betts and Dennis Scholl, for 7.14m shares of common stock and approximately US$1.1m of cash and notes. Dennis Scholl has joined Castle's board of directors, where he will serve as an independent director, while Richard Betts has joined Castle as a vice president and head of its newly-formed fine wine division.

As part of its fine wine strategy, Castle said it will "seek to recruit and represent the wines of a small number of premium, like-minded brand owners and wineries". The division will take advantage of Castle's existing infrastructure, including its distribution system.

Castle's chief operating office, John Glover, said: "The addition of Richard and Dennis gives instant credibility to Castle Brands' efforts in the wine industry."

Dennis Scholl added, "Betts & Scholl has been a great partnership. Now we've reached a critical tipping point: either we have to grow internally or seek a strategic partner to help us take our wines to the next level."

Last month, Castle posted a strong reduction in net losses for its first fiscal quarter.