Treasury Wine Estates (TWE), an Australian global winemaking and distribution business giant, announced the acquisition of DAOU Vineyards, a prestigious wine business founded by Georges and Daniel Daou. This $900 million deal, plus a potential earn-out of $100 million, is set to augment TWE’s focus on a portfolio that is increasingly luxury-led, especially in the U.S. and other key growth markets.
The Buzz Around the Acquisition
This acquisition has created quite a stir in the wine industry, not just because of the hefty price tag, but also due to DAOU Vineyards’ rapid growth and reputation in the luxury wine segment. As the fastest-growing luxury wine brand in the U.S. over the past year, DAOU Vineyards is widely known for its award-winning Cabernet Sauvignon-based PATRIMONY wines and unique consumer profile.
The Strategic Move
The inclusion of DAOU Vineyards in TWE’s portfolio is a strategic move, aiming to expedite the growth of their premium and luxury portfolio both in the U.S. and globally. This acquisition solidifies TWE’s position as a global leader in the luxury wine segment. Furthermore, the deal is expected to create significant value, capitalizing on the unique strengths of TWE and DAOU to curate a combined luxury portfolio with potential for worldwide expansion.
DAOU Vineyards: The Jewel of California Wine Region
DAOU Vineyards, established in 2007, is based in the renowned U.S. winemaking region of Paso Robles, California. DAOU’s fully integrated digital platform, DAOU+, adeptly combines e-commerce and membership with unique features that increase consumer loyalty.
The vineyard itself is quite a sight to behold, situated on a 212-acre hilltop estate in the Adelaida District of Paso Robles. The winery is known for its Cabernet Sauvignon and other Bordeaux varieties, produced in the perfect microclimate and remarkable geology of DAOU Mountain.
The Acquisition Details
The acquisition includes the DAOU brand, the DAOU Mountain Estate and hospitality site, four boutique luxury wineries, and approximately 400 acres of vineyards in the coveted Adelaida District of Paso Robles. This significant deal is expected to be finalized by the end of CY2023, pending U.S. anti-trust approval.
Georges and Daniel Daou, the founders of DAOU Vineyards, will continue to be actively involved in the business, with Georges as Founder and Daniel as Founder and DAOU Chief Winemaker.
Funding the Acquisition
Treasury will fund the acquisition with a fully underwritten entitlement offer of 825 million Australian dollars ($525.9 million), a A$157 million share placement, and $311 million of debt from a new $350 million facility.
The Future of DAOU and TWE
TWE has grand plans for DAOU. The company aims to bring the exceptional DAOU portfolio, winemaking philosophy, and unique luxury consumer experiences to new international markets, using TWE’s global marketing and distribution expertise. TWE will also explore sourcing opportunities outside the U.S. for DAOU as part of its global sourcing strategy.
A Change-Leader in the Industry
DAOU Vineyards is committed to producing collectible, world-class wines that rival the most respected appellations in the world. Both DAOU and TWE are change leaders in the wine industry and by joining forces, they aim to disrupt the industry and bring the very best in wine and luxury experiences to consumers around the world.
In a media release, Tim Ford, CEO, Treasury Wine Estates said: “The U.S. is the world’s largest wine market and we’re beyond thrilled to add DAOU to our portfolio, cementing our position as a global luxury wine leader. This is a transformative acquisition that accelerates the growth of our luxury portfolio globally and paves the way for new luxury consumer experiences. DAOU is an award-winning luxury wine business with an outstanding track record for growth and we have grand plans for DAOU to become the next brand with the international scale and luxury credentials of Penfolds. With DAOU, we will be well positioned to connect with a new generation of wine lovers, combining tradition with innovation, culture-led experiences, and global distribution.”
Georges and Daniel Daou, Founders, DAOU said: “The last frontier has always been international, and as part of the Treasury Wine Estates portfolio, we have unlocked the potential to be amongst the highest-end wines for consumers to enjoy globally. In Treasury Wine Estates, we have found a partner that not only understands the value of our brand and the premium assets we have cultivated but also the importance of ensuring that we maintain a relentless focus on quality and craftsmanship as we step into our future. Both companies are change leaders and by joining forces, we will continue to boldly disrupt the industry and bring the very best in wine and luxury experiences to consumers around the world.”
This acquisition marks a significant milestone in the wine industry, showcasing the potential of luxury wine brands and the increasing focus on premiumization in the industry. The future looks promising for both TWE and DAOU Vineyards as they collaboratively aim to scale new heights in the global wine market.