Duckhorn Portfolio agreed to be acquired and taken private by funds managed by the private equity firm Butterfly Equity in a deal valuing the luxury wine producer at approximately $1.95 billion. This acquisition represents a significant milestone for Duckhorn, as it seeks to leverage Butterfly's resources to strengthen its market position. Shareholders of Duckhorn will receive $11.10 per share in cash, reflecting a considerable premium of around 65% compared to the company's average share price during the 90-day trading period ending Friday.
Following the announcement, Duckhorn's stock saw an impressive surge of 102% during Monday's trading session, showcasing a robust market response to the news. The acquisition deal is contingent upon receiving regulatory clearance and gaining approval from Duckhorn's investors, with completion expected this winter.
Duckhorn's Chief Executive, Deirdre Mahlan, expressed enthusiasm about the announcement, deeming it excellent news for the company's future and its shareholders. "This proposal represents a substantial premium for Duckhorn portfolio stockholders," Mahlan stated. She added that the partnership with Butterfly Equity is expected to facilitate the enhancement of resources to further scale Duckhorn’s operations. Once the deal is finalized, Duckhorn will cease trading on the New York Stock Exchange and transition into a privately held enterprise.
The company, rooted in California, will maintain operations under its existing 11 winery brands affiliated with the Duckhorn Portfolio. Additionally, the agreement includes a 45-day 'go-shop' period that will expire on November 20, allowing Duckhorn to explore and accept higher acquisition offers if they arise.
Butterfly Partner Vishal Patel commented on the strong fundamentals of Duckhorn, stating, "In our view, Duckhorn possesses the best portfolio and strongest fundamentals in the industry." He noted that the combination of the company’s luxury wine brands and its structurally advantaged business model lays the groundwork for a powerful and scalable platform powered by both organic growth and strategic acquisitions. In other news, Duckhorn has reported its fiscal fourth-quarter adjusted earnings at $0.14 per share, slightly down from $0.15 the prior year.
Market analysts, poll by Capital IQ, anticipated normalized earnings per share of $0.10. Furthermore, sales increased by 7.3% year over year, amounting to $107.4 million, surpassing the consensus estimate of $104.8 million based on the same group of analysts..