CHAMP sells Australia's Accolade Wines to Carlyle

The initial investment was triggered by US-based Constellation Brands – which had acquired Australia’s BRL Hardy for A$1.85 billion in 2003 – running into financial difficulty and deciding to offload its Australian and European interests. CHAMP paid A$290 million for an 80% stake in the two divisions, with Constellation retaining 20%. Both parties will exit to Carlyle.

CHAMP’s first task was to integrate the two divisions, one of which operated out of Australia and the other out of the UK. They had separate strategies, management teams, and IT systems. There followed a series of bolt-on acquisitions that created a business with exports of more than A$350 million a year to over 140 countries. Two-thirds of its earnings come from offshore.

At the time of the acquisition, most of the company's production and exports came out of Australia under the Hardys brand, with a handful of operations in the US and South Africa, while there were significant sales into the UK and mainland Europe. Supported by a $234 million debt facility provided by GE Capital, Accolade picked up brands in the US, Latin America, and New Zealand, as well as the purchase of a distribution business in China.

“We followed a deliberate strategy of creating a New World wine platform so that we now have winemaking operations in Australia, New Zealand, South Africa, the United States and Chile, while also premiumizing our local offering through the acquisitions of Grant Burge Wines and the Fine Wine Partners portfolio, which included brands such as St. Hallett, Petaluma and Croser.” John Haddock, CHAMP’s CEO, said in a statement.

Investments were also made in Accolade’s supply chains to carry the heavier burden of a larger global footprint. On completion of a bottling and warehousing facility in Australia next year, the company will have the largest bottling, packaging, and distribution centers in Europe and the southern hemisphere.

GE Capital provided a further $300 million in financing in 2013 to consolidate and re-size the original loan. As of March 2015, CHAMP had returned 100% of its capital and was less than 2x geared. Another realization came later the same year as Accolade sold its 50% stake in UK-based drinks wholesaler Matthew Clark for an enterprise valuation of GBP200 million ($280 million).

Accolade is by some distance the largest remaining asset in CHAMP’s third fund, which closed at A$1.48 billion in 2010. The firm completed fundraising for its fourth vehicle in May 2017 with A$735 million in commitments.

Carlyle’s last investment in Australia came in June of 2017 when it teamed up with Pacific Equity Partners to acquire iNova Pharmaceuticals for $930 million.

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• Topics
• Australasia
• Consumer
• Trade sale
• Buyouts
• Australia
• CHAMP Private Equity
• The Carlyle Group
• Exit