New Zealand Winery Goldwater Estate Sold for $6 Million
Investment group will become one of country's biggest wine companies as part of the deal
Eric Arnold
Posted: March 24, 2006
New Zealand winery Goldwater Estate has been acquired by the New Zealand Wine Fund, an investment group that already owns Marlborough winery Vavasour. The deal is reportedly worth NZ$10 million (US$6.2 million).
Goldwater is one of the oldest wineries in New Zealand, established on Waiheke Island, near Auckland, in 1978. The small operation there produces mainly Bordeaux-style red wines, among the few of that style from New Zealand to have been rated outstanding (90 points or more on the Wine Spectator 100-point scale). The company expanded to Marlborough, on the South Island, in 1992 to begin making Sauvignon Blanc, now far and away the largest part of its production. Those wines also consistently score 90 points or higher.
The winery's founders, Kim and Jeanette Goldwater, will take one-third of the purchase price in cash, and reinvest the remaining two-thirds, giving them a 20 percent share of the new company and Kim a seat on the board. "I still want to play an active role in guiding the business forward for the next five years or so," he said. "I believe I have some wisdom I can contribute having been in the industry now for 30 years." He added that his daughter and son-in-law will remain involved in the business as well, primarily to help grow Goldwater's brand in the United States and United Kingdom.
Goldwater jointly owns Rapaura Vintners (with Matua and Babich), one of the largest wineries in Marlborough, where all of its Sauvignon Blanc is produced. But Goldwater relies primarily on contract-grown fruit. "They had the processing part of it, but they were constrained in their ability to buy more grapes to satisfy market demand," explained Peter Scutts, managing director of the Wine Fund. "The business was in good shape, it was just under-capitalized."
But now that New Zealand Wine Fund owns one-third of Rapaura and all of Vavasour (which also produces the Dashwood label), Scutts estimated that the company will be able to grow its total production from 160,000 cases this year to more than 250,000 cases in the next three years. That will make it one of the 10 largest wine companies in New Zealand. "Marlborough Sauvignon Blanc is in much higher demand than we can supply, particularly in the U.S.," said Scutts. He said that in the 2006 vintage, for which harvest is currently underway, Goldwater will produce approximately 45,000 cases.
Scutts, the former head of the New Zealand arm of advertising agency Young & Rubicam, established the New Zealand Wine Fund in 2002 with merchant bank Clavell Capital. They bought Vavasour from its group of approximately 40 investors shortly thereafter, and made the initial contact with Goldwater. "The more we thought about it, the more attractive it sounded," said Goldwater. "I'm now in my 70th year, and I talked it over with the kids, and they all felt that it was good for the brand and good for the three entities involved. It's a win-win situation for Vavasour, Goldwater and Rapaura Vintners."
