Foley Family Wines buys Mt Difficulty for $55 million
By Sophie Boot
Nov. 15 (BusinessDesk) - Foley Family Wines, which is controlled by US businessman Bill Foley, has bought Mt Difficulty Wines for about $55 million, subject to Overseas Investment Office approval.
The NZAX-listed company said last month that it was in talks to buy the winemaker, adding the premium Mt Difficulty and Roaring Meg brands to its suite which already includes Vavasour, Grove Mill and Te Kairanga.
The transaction also covers Mt Difficulty's property interests, winemaking and cellar door facilities. It's subject to approval from shareholders of both companies along with the OIO. Foley Family Wines will ask shareholders for approval in the first quarter of 2018 and anticipates the acquisition will be completed around June 30, 2018.
The company is considering funding options for the deal and said it has had "positive preliminary indications" from its bank so is considering that along with other capital raising options.
Foley Family Wines posted a 38 percent decline in 2017 annual profit to $3.1 million, including a $2.6 million charge on damage caused to its Grove Mill Winery site in Marlborough after the November 2016 Kaikoura earthquake and $4.7 million from insurance payments.
The company spent $3.2 million on plant, property and equipment due to the earthquake damage and had just $263,000 of cash and equivalents at the June 30 balance date.
The NZAX-listed shares last traded at $1.49 and are flat this year.