Treasury Wine Estates Limited (ASX:TWE) signed an agreement to acquire Frank Family Vineyards from Rich and his wife Leslie Frank for approximately $320 million on November 17, 2021. The transaction is subject to customary working capital adjustments. The acquisition will be funded via a combination of debt and cash, including proceeds from recent US asset divestments.

The funding involved a new $240m underwritten acquisition bridge facility. Transaction value implies an EV/F21 EBITDAS acquisition multiple of 13.2x. In F21, Frank Family Vineyards generated NSR and EBITS of approximately $54 million and $21 million respectively.

Rich and Leslie Frank, who will both remain with the business as advisers and will also take on new leadership roles with Treasury Americas. Frank Family winemaker and general manager, Todd Graff, will remain with Frank Family Vineyards after closing. The acquisition is expected to be completed in December 2021.

The transaction is EPS accretive from the acquisition date, with EBITS growth expected for Frank Family from F23, the first full year of ownership. Macquarie Capital (Australia) Limited acted as sole financial advisor to Treasury Wine Estates, Houlihan Lokey acted as financial advisor to Frank Family Vineyards. Justin P. Hedge, Edward A. Deibert, Teresa L. Johnson, Kenneth A. Neale, William J. Needle, Nancy L. Perkins, David J. Reis and Kathleen Wechter of Arnold & Porter Kaye Scholer LLP acted as a legal advisor to Frank Family Vineyards, LLC.