Concha y Toro Buying US Winery

Chilean winemaker Vina Concha y Toro says it is acquiring California’s Fetzer Vineyards and related assets from Brown-Forman, the company that produces Jack Daniels whiskey, for $238m. A Concha y Toro spokesman tells LatinFinance that to finance the deal, the company has obtained a $125m bridge loan from Deutsche Bank maturing 6 months after the deal closes in April. He does not disclose pricing of the loan. The company will likely issue a bond of no more than $200m to refinance the loan and for working capital. “We still don’t know where we will issue the bond or in what currency,” he says. The buyer will also use cash on hand and existing credit lines, the spokesman adds. Celfin says the price paid implies a multiple of 1.5x sales and 7.6x Ebitda. “We see the deal as a substantial move toward internationalization for Concha y Toro, taking a significant step into the US market,” Celfin says, adding that Fetzer is the eighth largest player in the US wine market. BCI Estudios says the deal is in line with Concha y Toro’s internationalization plans by expanding its presence in key markets and reaffirms the positive perspectives for the company. The acquisition includes 6 wine brands, 429 hectares of owned and leased vineyards in Mendocino County, California, cellars with capacity for 36m liters, 6m liters of inventories, and a bottling plant. Deutsche Bank acted as Concha y Toro’s financial advisor while Rabo Securities and Rothschild advised Brown-Forman, according to the Concha y Toro spokesman.