Auction house Acker Merrall & Condit may soon have a wealthy new investor. John Kapon, Acker's CEO, confirmed to Wine Spectator that the firm has entered into a memorandum of understanding with Madison Wine Holdings Limited of Hong Kong. The two companies are negotiating Madison purchasing a 45 percent, non-controlling interest in affiliate Acker Merrall & Condit Ltd.
"We look forward to growing our client base in the vast Asian market and feel that Madison Wine is the right strategic partner for us to continue to grow in China and beyond," said Kapon. "There is no plan to change the name or current operations of Acker Merrall & Condit's auction businesses, and we expect that it will be business as usual for myself and all our loyal clients."
A memorandum of understanding is a non-binding agreement of planned terms. This is the first step in the acquisition process, and there is no defined timeframe. Kapon said he was not at liberty to discuss any financial terms, but if a deal is reached, Acker Merrall & Condit's New York and Hong Kong–based auction businesses will still be owned by Acker Merrall & Condit Ltd.
Madison Wine Holdings was founded in 2012 by Raymond Ting, chairman and executive director of Credit China, a publicly traded loan company. Madison is both a wine wholesaler and retailer, specializing in premium labels from top wine regions.
"Raymond Ting is one of the foremost wine collectors and enthusiasts in Asia," said Kapon. "He brings a wealth of expertise and relationships to Acker's auction business. We expect that the proposed transaction will help further solidify Acker Merrall & Condit's position as the No. 1 destination in the world for fine and rare wine."
Acker Merrall & Condit, founded in 1820, is New York City's oldest wine shop. In the late 1990s, Kapon, a third-generation wine retailer, ventured into the city's wine auction fray and today has become the leader of the wine auction pack, with annual revenues of $69.9 million. Acker has been an aggressive player in the young Hong Kong wine-auction market as well, conducting some of the Chinese territory's top sales.
"For John, this is a very smart move," said an executive at a rival auction house. "He's looking to grow aggressively and this provides more capital." For Acker, the deal could allow it to finance a faster expansion in a promising market. For Madison, the deal could give it a well-known partner as it opens new stores.