Randall Wine Group; Sellick's Hill

Treasury’s $100m licensing agreement to offload commercial brands in the US

March 10, 2021
By Ioni Doherty

Treasury has moved swiftly since its half yearly results, announcing $100 million licensing agreement with The Wine Group for several commercial brands in its US portfolio.

Along with speculation of a takeover, the news saw TWE’s shares rise before closing out the day at $11.10.

The agreement means that The Wine Group will source and sell the Beringer Main & Vine, Beringer Founders’ Estate, Coastal Estates and Meridian brands in the Americas, leaving Treasury Americas to focus on the premium wine market. Last year these brands contributed 2.3m cases of volume, $92 million of net sales revenue (NSR) and $13.5m of gross profit.

The Wine Group is the second largest wine company in the US (by volume).

It’s matter of weeks since the business launched the Penfolds Californian Collection and announced a business restructure in which Treasury Americas would operate as a standalone division within the business, its focus on growth in luxury and masstige markets.

TWE’s Chief Executive Officer Tim Ford described the transaction as “a significant milestone towards our plans to deliver the future state premium US wine business…we can now focus solely on continuing the growth of our premium brand portfolio to drive future performance in the Americas”.

Cate Hardy, CEO of The Wine Group said, “The acquisition of these popular brands further positions The Wine Group as a global leader in wine. Adding these brands complements TWG’s leadership in the value segment alongside our growing portfolio of premium wines.”

The Wine Group will acquire existing inventories associated with these brands on a progressive drawdown basis and will assume responsibility for related future bulk wine supply contracts.

TWE is implementing plans announced at hits half yearly results to deliver a premium focused business in the Americas with broadly half the volume.

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