AUSTRALIA: AWH buys Chestnut Grove Wines

Australian Wine Holdings (AWH) has reached an agreement to acquire the West Australian wine company, Chestnut Grove Wines, from the Kordic family for A$3m ($1.68m). The acquisition includes the Chestnut Grove labels, goodwill, trademarks, license and marketing material, as well as wine stocks, plant and equipment.

The deal includes a minimum cash element of A$1.6m ($896,800), with shares in AWH accounting for the balance of the purchase price. The deal will not be finalised until AWH has completed valuations and due diligence. AWH expects the purchase to be concluded on or before 1 September 2002 and anticipates Chestnut Grove will contribute to earnings in the 2003 fiscal year. Chestnut Grove achieved sales of 10,000 cases in 2001 under its Chestnut Grove and Peppermint Creek brands.

Mike Calneggia, AWH's executive chairman, said the deal marked the first stage in the company's strategy to focus on building a portfolio of quality branded wine companies. "The Kordic family have achieved a great deal with Chestnut Grove Wines during the past 10 years and we are pleased that they have chosen AWH to take the brand to the next level," Calneggia said.

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