The Bain Capital-controlled Accolade Wines has agreed an acquisition deal with Pernod Ricard to buy its wine assets in Australia, New Zealand and Spain.
While commercial terms of the transaction are confidential, industry experts estimate are that the deal was worth no more than $100m.
It comes after DataRoom revealed talks were back on between the pair after Accolade walked away from plans for a back-door listing into Australian Vintage.
Australia based Accolade operates globally with a strong UK presence and has brands including Hardys, St Hallett and Grant Burge, Bankrock Station, St Hallett, Petaluma, Mud House, Dolly Wines, Jam Shed, J-Harden and Wise Wolf brands.
It has been looking at both Australian Vintage and Pernod Ricard for several months as a possible acquisition option and sources say a deal was in the process of being finalised.
Pernod Ricard is selling brands including Australia’s Jacob’s Creek, Orlando, St Hugo and Stoneleigh, along with New Zealand’s Brancott Estate and Church Road and Spain’s Campo Viejo, Ysios, Tarsus and Azpilicueta.
It has had wine assets up for sale through JPMorgan and Morgan Stanley, while Accolade Wines is now controlled by lender Bain Capital following a recapitalisation of the business.
Pernod Ricard launched a sale process for its wine assets around 2019 with expectations they would sell for at least $700m but that was when the wine industry conditions were stronger.
Bain gained control of Accolade in the past year as the lead in a Moelis-advised lender group, with Rothschild advising the company.
It was previously controlled by The Carlyle Group, which purchased the business in 2018 for $1bn.
The parent entity which owns Accolade Wines is controlled by Bain, Intermediate Capital Group, Capital Four, Sona Asset Management and Terry Asset Management and is known as Australian Wine Holdco Limited.
Accolade is one of the largest wine companies in the world.
Falling grape prices and an oversupply have hurt the industry and consolidation is believed to be one way to ensure groups stay profitable.
Many have pinned their hopes on the reopening of China exports.
The deal came on the same day as The Australian’s Global Food Forum in Brisbane on Wednesday where wine exports and other agricultural trade was on the agenda for discussion.
In a statement released by Accolade Wine owner AWL on Wednesday, it said the combined business will have a more diversified portfolio of highly complementary old- and new-world wine labels, operations in every continent and be in a better position to meet the challenges facing the wine industry, providing a more certain and financially sustainable future for the business.
The Pernod Ricard portfolio being sold produces over 10 million cases annually.
“Combining Accolade Wines with the Pernod Ricard assets will create a more certain and financially sustainable future for the business,” said AWL spokesman Joshua Hartz.
“The combined business will be better able to adapt to changing consumer tastes and meet the structural challenges facing the wine industry.”
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