Vincor International, Canada's largest wine company, has signed an agreement to purchase The R. H. Phillips Vineyard, based 30 miles northeast of Napa Valley, in Yolo County. The $95 million deal encompasses the winery, brand name, current inventory and 1,600 acres of vineyards in the Dunnigan Hills appellation and elsewhere throughout California.
Completion of the deal, which includes the assumption by Vincor of $35 million in R.H. Phillips debt, is contingent upon the approval of the shareholders of 90 percent of R.H. Phillips stock. The deal is slated to be concluded by the end of September.
R.H. Phillips is best known for its Toasted Head Chardonnay and EXP Syrah, each of which retails for about $14 per bottle. Last year, R.H. Phillips had $29.2 million in sales, and the winery anticipates selling 500,000 cases this year.
The acquisition would allow Vincor to expand to California using R.H. Phillips' national distribution network and its 30-person sales team. Vincor's estates, located in four Canadian provinces, include ice-wine producer Inniskillin, Jackson-Triggs, Sumac Ridge and Hawthorne Mountain.
"[R.H. Phillips] will provide a solid platform for any future U.S. acquisitions as well as the international expansion of Vincor's business," said Vincor president and CEO Donald Triggs.
"In the last two years we've hired investment bankers in Australia, California, and Chile, and are actively looking in all those regions [for further winery acquisitions]," added Triggs.
Founded in 1981 by John and Karl Giguiere, R.H. Phillips has been a public company since 1995. At the start of the year, it traded on the Nasdaq market at 2 3/4, but news of the deal brought the price to 6 13/16 at closing today. Vincor, which trades on the Toronto Stock Exchange, will pay $7 per share.
"They made a really good offer for our shareholders," said Lane Giguiere, director of public relations for R.H. Phillips. "Because they have no presence in the U.S., they want to keep us all intact, and it's great for our employees." John and Karl Giguiere will stay on in management roles, and no other changes in the R.H. Phillips staff are planned.
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