CHAMP in $1bn Accolade Wines sale to The Carlyle Group

AN American private equity investor is shelling out $1bn for Reynella-based Accolade Wines — owner of Hardy’s, Grant Burge Wines, St Hallet’s and Banrock Station — gaining entry into some of the strongest wine markets in the world.

Wine bottle label and glass of Hardy's Cellar Reserve Show Port.

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AN American private equity investor has made its maiden entry into the lucrative Australian wine industry with a $1 billion buyout of SA-headquartered global wine company Accolade Wines.

The Carlyle Group is on its way to becoming the new owner of Accolade Wines, which is behind SA wine brands, including Hardy’s, Grant Burge Wines, St Hallet’s and Banrock Station.

Accolade is the largest producer of Australian wine, exporting more than $350 million worth of it annually to more than 140 countries.

More than two thirds of its earnings — across a 51-brand portfolio — come from offshore, especially UK.

It is Carlyle’s first investment in the wine industry anywhere in the world and is its second active investment in the Australian market; the group bought into logistics group BIS Industries in December. It had previously invested in Coates Hire, Healthscope, Ozforex and Qube Logistics.

A Carlyle spokeswoman told The Advertiser Accolade was a companywith “great brands and strong market positions, with multiple growth opportunities, particularly in Asian markets.”

“We look forward to supporting Accolade Wines with Carlyle’s global resources, and investing in the business and working with staff, suppliers and customers to drive growth,” she said.

The deal in expected to settle in a few months.

Accolade has been owned by Sydney private equity group CHAMP Private Equity (80 per cent) and New York liquor company Constellation Brands (20 per cent) since 2011.

“We saw an opportunity (in 2011), but the wine industry has long cycles so we knew we had to commit to a longer hold in order to realise that opportunity,” CHAMP Private Equity chief executive John Haddock said.

CHAMP paid $290 million in 2011 to buy two separate divisions from Constellation to create Accolade Wines.

Its wine operations now extend across Australia to New Zealand, South Africa, the US and Chile.

CHAMP has also made significant investment in Accolade’s SA production facilities.

A $40 million new bottling and warehousing facility is currently under construction at Berri in SA will be one of the largest bottling, packaging and distribution centres in the southern Hemisphere.

Once completed, the facility is expected to employ 40 people and have bottling capacity of up to eight million cases of wine annually and storage capacity of more than 22 million pallets of inventory. Accolade’s old bottling works was shut down in 2012 with the loss of 175 jobs.

It will complement an existing production facility, Accolade Park, in the UK, which is Europe’s largest.

Its Berri Estates arm is the largest Wine Bag in Box (BiB), or cask manufacturing facility in the country, producing 85,000 casks per day, and approximately 70 million litres per year.

In 2016, Accolade bought premium brands from Australian drinks company Lion to diversify its portfolio.

But CHAMP had been looking for an exit for at least a year — plans to list Accolade on the Australian sharemarket were abandoned last year.

It has reportedly been in an exclusive discussion with Carlyle since February, before which negotiations were also held with European private equity firm PAI Partners and another US investment giant TPG Capital.

Accolade Wines employs 1600 staff in 12 countries.