Beringer Blass Wines Estates, the world's leading premium wine group and a major division of Foster's Group, today announced the purchase of International Wine Accessories (IWA). IWA is a recognised industry leader in the provision of wine cellars, wine racks, cooling units, specialist glassware, corkscrews and other wine-related accessories to wine connoisseurs, predominantly in the USA.
IWA will be managed as part of Beringer Blass's global wine clubs division.
The purchase price is $US18.0m ($A35m) and is expected to be EPS positive from day one.
"Consumer demand for high-end wine accessories closely mirrors the demand for premium wine", said Mr Terry Davis, Managing Director of Beringer Blass Wines Estates (Beringer Blass).
"Our global distribution strengths will enable us to continue developing our wine clubs business around the world, with high-end wine accessories being a natural addition to that business. The purchase will also provide a distinctive specialty offering for our on-premise trade customers and cellar door visitors."
Acknowledging the importance of innovation and experience in IWA's success, Mr Davis added: "We are very pleased that the founding owner, Bob Orenstein, and his management team have agreed to stay on for the next three years."
IWA is a profitable and growing business with a high return on capital employed and low working capital requirements. Annual sales revenue is around $US20m ($A39m).
Since its establishment in 1983, IWA has developed strong relationships with leading international manufacturers of prestigious wine-related products, including Riedel, Spiegelau, Le Creuset, Metrokane, Breezaire, Vinotheque and Transthem. IWA is one of the largest importers of both Riedel and Spiegelau glassware into the US.
IWA's experience and purchasing power in a growing niche market will be leveraged to enhance Beringer Blass's wine clubs business around the world, with added benefits for the wine trade business.
The acquisition:
The acquisition will be funded from Foster's recent successful capital raising.
Further Information
Media:
Rell Hannah
Beringer Blass
Tel: +613 8626 3307
Mob: 0419 369 075
Email: rell.hannah@beringerblass.com.au
Analysts:
Domenic Panaccio
V-P Capital Markets
Tel: +613 9633 2641
Beringer Blass - http://www.beringerblass.com/
Internation Wine Accessories - http://www.iwawine.com/
Beringer Blass Wine Estates is the world's leading premium wine group. Its 19th century winemaking heritage stems from the pioneering achievements of the Beringer brothers in California's Napa Valley and the Chaffey brothers in the Murray River region of Victoria, Australia. From these beginnings grew two great winemaking companies, Beringer Wine Estates and Mildara Blass Limited. Their union in October 2000, as the wine division of Foster's, created a diverse, global company with unrivalled capability in premium winemaking, brand management, and international distribution. Employing 4,000 people across the world, Beringer Blass sells more than 14 million cases of premium wine annually, and packages a further 12.5 million cases on behalf of third party clients.
Ownership: established in 1983 by the current owner and CEO, Bob Orenstein
Sales Revenue: approximately $US20 million ($A39 m) p.a.
Assets: only material assets are the inventory and database
Location: Dallas, Texas
Products: an extensive range of wine-related products, including
Customer base: The majority of sales revenue (approx. 77%) is generated from consumers via catalogue or internet sales. The wholesale business is primarily through wine stores, wineries, hotels and restaurants. IWA has a database of 124,000 active customers. The web site was launched in October 1999 and achieved sales of US$1.0m (about 5% of total) in the first 12 months.
Marketing: More than three million catalogues are distributed each year. Catalogues are designed and printed twice a year for both the consumer and wholesale markets. Nine telemarketing sales people perform both inbound and outbound selling functions. Sophisticated call centre software ensures that calls are routed properly and on-hold time is minimised. Well trained staff have real-time, on-line access to the inventory system to check availability and pricing. A sophisticated database program tracks customer order trends, ensuring optimum timing and targeting for mailings. IWA has a significant internet presence which accounted 10% of sales in calendar 2000.
Distribution: via common carriers and the US postal services.
Total US catalogue sales are worth around $US100 billion ($A196 billion) and are forecast to grow twice as fast as traditional retail sales. Specialist mail-order is now the largest sector within the US mail-order market and is forecast to reach $US42 billion ($A82 billion) by 2002, with specialty foods and beverages predicted to be a boom area.
