Simon Gilbert Wines has reached agreement to acquire the Cassegrain Wines premium wine business.

The Australian wine company announced the deal today (28 November), which secures a 70% stake in the business. Cassegrain Wines chief executive John Cassegrain will hold the remaining 30% interest.
Simon Gilbert is also set to provide contract winemaking and other services to Cassegrain Wines, the company added.

Cassegrain Wines, which was established in 1985, posted revenues in the 2005 financial year of around A$5.6m (US$4.1m). Profit for the period reached A$200,000 EBIT for the period.

"Simon Gilbert Wines and John Cassegrain have agreed to jointly acquire the Cassegrain wine business on the expectation that combining the resources of the two operations in production, sales and distribution will significantly improve the financial performance of both businesses, with most of the benefits expected to come through after the initial restructuring period and through the second and third year following completion of the acquisition," the company added.

The purchase is expected to cost A$3.75m, with A$1m paid on settlement. Six months later, A$500,000 will be paid, followed by A$600,000 in 12 months and A$650,000 on 30 November, 2007.