Duckhorn Portfolio to acquire Sonoma-Cutrer Vineyards from Brown-Forman

Duckhorn Portfolio (NAPA) announced that it has entered into a definitive agreement to acquire Sonoma-Cutrer Vineyards, one of the largest luxury Chardonnay wineries in the U.S., from Brown-Forman Corporation (BF.A), for approximately $400 million to be paid in a combination of company stock and cash. Under the terms of the agreement, Brown-Forman will receive 31.5M shares of the company’s common stock, valued at approximately $350M based on a 60-day volume-weighted average price as of November 1, 2023, which represents an ownership percentage of approximately 21.5% of the company post-closing. Brown-Forman will also receive cash consideration of approximately $50M, subject to certain adjustments. The cash portion of the purchase price, plus transaction-related expenses, will be financed by borrowings under the company’s existing revolving credit facility. As of closing, net leverage is expected to remain unchanged, excluding synergies. Pursuant to the agreement, Brown-Forman will be entitled to nominate two directors to The Duckhorn Portfolio’s Board of Directors. The transaction is anticipated to be completed in the third quarter of the company’s fiscal year 2024, subject to regulatory approvals and customary closing conditions.