Casella Family Brands has popped the cork on plans to acquire up Peter Lehmann Wines for around $57 million.
The two family businesses have agreed to a deal that will see New South Wales-based Casella pay $1.50 per share to acquire 100% of outstanding shares in South Australian-based Lehmann Wines.
The purchase comes for Casella – the family behind the internationally popular Yellow Tail wine range – after news yesterday a former director of the company had been linked to a drug syndicate.
Peter Lehmann Wines majority shareholder Hess Group Australia and substantial shareholder Margaret Lehmann, the wife of the late Peter Lehmann, announced yesterday they had agreed to the deal.
Lehmann will give up her 10.4% stake in the company, telling Fairfax Media her late husband would have approved of the deal.
Known as the ‘Baron of the Barossa’, winemaker Peter Lehmann died in June last year.
“John Casella is himself a grower and a winemaker and shares the values that led to the creation of the company,” said Margaret Lehmann in a statement.
CFB managing director John Casella told SmartCompany that with the strong support of Mrs Lehmann, the acquisition sees PLW returned to family ownership.
“Throughout the process it has been important to both parties that we are aligned on the vision and strategic direction for the business, maintain our mutual values of family and community, and continue generations of hard work and dedication to winemaking,” says Casella.
“Having come from generations of family winemaking, I understand the importance of honouring the Lehmann family’s winemaking philosophy; to create exceptional wines with varietal and regional integrity with a commitment to over delivering on value. Our philosophy is similar; we create the best possible wine with the resources we have available to us, in order to consistently over deliver on quality.”
“I am personally delighted and honoured to have the opportunity to uphold the family’s legacy, and keep the Lehmann name at the forefront of Australian winemaking.”
He said the acquisition will play an integral part in building “a family of quality brands” across different price segments and Australian wine regions.
“We have a clearly defined strategy to extend our Casella brand portfolio to include an incredible range of premium wines that highlight the enormous diversity of the Barossa and its sub-regions,” says Casella.
“The strength of Casella’s global footprint affords us the opportunity to grow the Peter Lehmann wine portfolio and present the Barossa region on a global stage.”
Jeff Bond, Peter Lehmann Wines chief executive officer, said in the statement: “For our growers, employees and customers, the shared vision and values of the two companies will create a strong platform for an exciting future.”
Angela Robins, accredited family business adviser at MGI Adelaide, told SmartCompany the decision for two family wine businesses to come together was likely a strategic move to align two similarly structured companies.
But she says the new entity must be careful that values and culture do actually align.
“There is a risk as much as a strategy for doing it,” says Robins. “Family businesses have very specific cultures and values and they may find they don’t exist in the other company.”
“Given the recent Lehmann’s tragedy, the company is likely still trying to adjust to its values. It [the acquisition] will be a very significant change to both of those businesses.”