Marlborough Lines has agreed to invest $89 million to purchase an 80% shareholding in Yealands Wine Group, the two companies announced today.
Yealands Wine Group founder Peter Yealands welcomed the investment: “In looking for an investor we wanted someone who shared our beliefs and who would help us to continue to build the business, both in expanding our fruit supply and in developing our international marketing programme.”
Marlborough Lines Managing Director Ken Forrest said the purchase is a good investment for the Company and will provide increased dividends to consumers. It will also provide long-term economic and social benefits to the region.
Mr Forrest said Marlborough Lines had realised profits of over $100 m from investments which up until recently had been held outside the region, and the investment in Yealands provides an opportunity to reinvest locally.
“Opportunities to invest in the electricity industry are limited and this led to us looking to other options. We are very pleased to have the opportunity to acquire an 80% interest in Yealands,” Mr Forrest said.
“We have received independent advice and carried out a comprehensive review of Yealands’ business and have been impressed with their achievements, particularly in light of their relatively short existence, and with their ambitious plans for growth. We are satisfied that this will be a successful investment which will broaden our asset base for the benefit of the people of Marlborough. We are pleased to be able to demonstrate our confidence in the future of Marlborough’s most important industry,” Mr Forrest said.
Marlborough Electric Power Trust Chair Ross Inder says the investment fits well with the objectives of Marlborough Lines for the future: to make long-term investments which will produce income which can be returned to the consumers of Marlborough Lines.
“The investment policy of Marlborough Lines, which the Trust has supported, has seen very strong growth in its capital position. The Company now has no debt and over $100m in cash from investments which were made outside of Marlborough.”
“We have been pleased to bring our investment returns back to Marlborough and give the people of Marlborough significant ownership in the industry which sustains this region,” Mr Inder said.
Mr Yealands said that the Yealands Wine Group was continuing to perform well ahead of forecasts with unparalleled demand coming from both the domestic and international markets.
“The current vintage is going to be one of the very best on record and our 2015 wines our finest yet,” he said.
Key facts about the transaction
· Marlborough Lines has invested $89 million for 80 percent of the YWG equity
· Yealands has over 1,100 hectares of planted vineyards in Marlborough and Hawkes Bay. Its principal winery is at Seaview in Marlborough; it also has a second winery in Hawkes Bay.
· Yealands has 130 permanent employees. It exports more than one million cases of wine each year to markets to over 80 countries.
· Many of New Zealand’s wine companies are overseas owned. This transaction will maintain 100% New Zealand ownership of one of the top six.
· Yealands founder Peter Yealands will remain a shareholder and will continue his involvement with the company’s operations. Yealands CEO Jason Judkins will also hold shares in the company following this transaction.
· Settlement of the change of shareholding is imminent and will not affect day-to-day operations.
About Marlborough Lines
Marlborough Lines Limited is an electricity network owner/operator delivering electricity to some 24,500 customers via more than 3,350 kilometres of lines and cables over an area of 11,330 square kilometres. Its shareholding comprises 28 million $1.00 shares issued, fully paid up and held by the Marlborough Electric Power Trust on behalf of Marlborough’s current and future electricity users. Since 1996, Marlborough Lines has also held investments in other network companies outside of Marlborough.
About Yealands Wine Group
Based in Marlborough’s Awatere Valley, Yealands Family Wines is New Zealand’s leading environmentally sustainable winery. Developed by entrepreneur Peter Yealands, the winery features advanced green technology in every aspect of design and function.
The Yealands Wine Group was formed in September 2011, when Yealands Estate acquired the well- established Hawkes Bay boutique winery, Crossroads and successful Marlborough brand The Crossings. The combined entity is now New Zealand’s sixth largest wine exporter, with a global reach into more than 80 international markets.
The global brands of the combined portfolio include: Yealands Estate and Peter Yealands, Crossroads, and The Crossings.