Xanadu Wines Ltd has acquired the key premium brands and business name of the South Australian wine producer Norman Wines for a total of A$3.7m (US$1.8m) after reaching an agreement with the company's receivers.

The deal also includes Norman's Clarendon Winery, vineyard and its packaged stock of premium wines. In a company statement Xanadu said that as part of the agreement it would offer jobs to all Clarendon winery staff and consider employment to other Norman workers.

The acquisition comes just three months after merger negotiations between Xanadu and Norman's were shelved prior to Normans going into receivership.

According to Xanadu the acquisition and associated working capital will be funded by a combination of equity and debt. Xanadu will raise between A$3.5m and A$4.5m from a share placement at 20 cents per share.

"This transaction enables us to purchase all the prime assets we wanted when we began negotiating with Normans some months ago without having to take assets and liabilities that we did not need. And we have done so at a reasonable price," said Andrew Moore, managing director of Xanadu.

"It will strengthen our export sales to the extent of fast tracking us five years ahead and will give us an excellent return on capital," he added.

Xanadu's net profit after tax for the financial year ending June 30th 2002, including Norman's returns for less than eight months trading is forecast to be A$2.3m.

The company also announced that it has appointed distribution company Red and White, part of the Casama group as its national distributor.

To view related research reports, please follow the links below:-

The 2000-2005 World Outlook for Wine
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