McWilliam’s Wines completes recapitalisation

January 30, 2019
By Alana House

McWilliam’s Wines Group has successfully completed a recapitalisation with its strategic partner, Margaret River Wine Production (MRWP).

The transaction was completed on Friday, January 25, 2018. MRWP, together with an Australian agricultural fund manager Laguna Bay, has provided McWilliam’s with $15.8 million of capital which will be primarily used to fund working capital.

McWilliam’s experienced a strong first-half trading performance and the company said in a statement that it is confident in the group’s long-term prospects, with a series of initiatives planned to improve and increase profitability.

The immediate focus will be to reset the McWilliams business following completion of the recapitalisation. 

McWilliam’s Chief Executive David Pitt (pictured above) said: “We have had a strategic relationship with MRWP for a number of years and this transaction takes our partnership to the next level. We believe that the expertise and assets within McWilliam’s, MRWP, and the broader Fogarty Wine Group (FWG) can deliver a great outcome for all when we are strategically aligned.” 

“This is an exciting next chapter in our history and through the completion of this transaction we can continue to build upon the pioneering spirit that flows throughout this family organisation. Wines produced by McWilliam’s continue to be a benchmark of Australian winemaking led by the Mount Pleasant brand.” 

Peter Fogarty, Chairman of MRWP and FWG, echoed David Pitt’s comments: “We have been working closely with McWilliam’s and looking to jointly expand our working relationship both in Australia and internationally. David and I are aligned on strategy and look forward to seeing benefits across our respective businesses. We welcome Laguna Bay as an investor in our Group to assist us in driving further growth.” 

This transaction is part of a broader investment by Laguna Bay in MRWP and FWG and the parties were supported and assisted by their lead banker Commonwealth Bank of Australia.

Pitt told The Australian Financial Review that while McWilliam’s currently generated 85% of its sales in the domestic market, but China would be a much larger market moving forward.

“We certainly see that as a significant growth opportunity,” he said. 

He also noted that he intends to cut up to $10 million in costs from McWilliam’s operations and wants the winemaker to have a stronger focus on high-quality wines.

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