Butterfly Equity Acquires The Duckhorn Portfolio: A Significant Move for the Luxury Wine Industry

The US-based private equity firm Butterfly Equity has reached an agreement to acquire the wine group The Duckhorn Portfolio. The offer amounts to approximately 1.95 billion US dollars in cash, with which the California company is to be acquired. The CEO and Chair of The Duckhorn Portfolio, Deirdre Mahlan, praised the deal as groundbreaking for both the company and the shareholders, who will receive a substantial premium. Under the agreement, shareholders will receive 11.10 US dollars per share, representing a premium of over 65% compared to the volume-weighted average share price over the last 90 days. Among the shareholders is the spirits giant Brown-Forman, which acquired 21% of the company in November last year when it sold the Sonoma-Cutrer business to The Duckhorn Portfolio. Just Drinks has sought a comment from Brown-Forman. Butterfly Equity, known for investments in the food sector, has holdings in companies such as Generous Brands and Chosen Foods. Vishal Patel, partner at Butterfly, emphasized Duckhorn's exceptional position as a leading producer in the luxury wine segment and praised the business foundation as outstanding in the industry. The agreement between Butterfly and The Duckhorn Portfolio, expected to be completed in the winter, includes a 45-day period in which Duckhorn can review alternative offers. A majority of shareholders have already agreed to exercise their voting rights in favor of the deal, subject to certain conditions. Alongside the announcement of this acquisition, The Duckhorn Portfolio also released its annual results. Net sales rose to 405.5 million US dollars, a slight increase of 0.7% compared to the previous year. However, excluding Sonoma-Cutrer, net sales decreased by 4.6%. The net profit amounted to 56 million US dollars, compared to 69.3 million US dollars in the previous year. Deirdre Mahlan expressed positive sentiments regarding the successful integration of the Sonoma-Cutrer brand and sees the company well-positioned for growth and profitability through the fiscal year 2025 and beyond.