Australian wine group Accolade Wines has been taken over by a consortium of investors as part of a recapitalisation plan to salvage the company’s “unsustainable balance sheet”.
The five-strong group, Australian Wine Holdco, will take equity ownership of Accolade from existing shareholders, the company said in a statement today (Friday 2 February).
Accolad, home to wine brands including Hardys and Banrock Station, was bought by The Carlyle Group in 2018 from Champ Private Equity in a deal worth A$1bn (then-US$768m).
The move will not have “immediate” impact on operations, jobs, suppliers or customers, Accolade said.
“We hope this restructure will build a more secure long-term future of the business. We will be working with and supporting Accolade’s management to focus on operations and stakeholders,” a spokesperson said.
“We recognise Accolade’s South Australian operations will be crucial to the success of the company and understand the important role the company plays in the local grape growing industry, and the broader South Australian economy. We are committed to working with Accolade’s business partners of growers and customers to ensure a sustainable business.”
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Australian Wine Holdco comprises funds backed by existing Accolade financial partners Bain Capital Special Situations, Intermediate Capital Group, Capital Four, Sona Asset Management and Samuel Terry Asset Management.
The recapitalisation plan is expected to be completed by mid-year and will “result in a substantial reduction in Accolade’s total senior interest-bearing debt”, Accolade said.
It added: “A corresponding reduction in annual interest expense and additional funding from each of Australian Wine Holdco’s investors will provide greater operational flexibility to invest in the growth of the business for the benefit of all stakeholders.
It follows a testing few years for Accolade following China’s hefty tariffs on Australian wine and declining consumption of wine worldwide.
“Like all Australian winemakers, we have been hit by a number of challenging macro-economic and industry headwinds in recent years,” CEO Robert Foye said.
“Despite our strong stable of brands and leadership positions in key markets, as well as operational measures taken to strengthen the business, our ability to respond to these challenges and grow has been hampered by an unsustainable balance sheet.
“With this recapitalisation and the support of our new shareholders, we will be ideally positioned to take advantage of the significant opportunities to meet customer demand and grow sales around the world.”