Treasury Wine Estates Ltd said it agreed to acquire DAOU Vineyards, the acclaimed luxury wine business founded by brothers and co-proprietors Georges and Daniel Daou for an upfront consideration of $900 million, plus an additional earn-out of up to $100 million. This transformative deal will accelerate TWE's focus on a portfolio that is increasingly luxury-led with a greater presence in key growth markets such as the U.S.

Founded in 2007 and based in the U.S. winemaking region of Paso Robles, California, DAOU is the fastest-growing luxury wine brand in the U.S. trade over the past year, according to Circana. It is recognized throughout the industry for its award-winning Cabernet Sauvignon-based Patrimony wines, unique consumer profile, and benchmark-setting luxury experiences. DAOU's fully integrated digital platform, DAOU+, combines e-commerce and membership with seamless and unique features that increase consumer loyalty.

DAOU is a strong complement to TWE's existing portfolio in upper-luxury price points and fills a key portfolio opportunity for Treasury Americas in the $20-40 range, as well as strengthens its luxury portfolio in the $40+ range. Utilizing TWE's global marketing and distribution expertise, the company's long-term vision is to bring the exceptional DAOU portfolio, winemaking philosophy and unique luxury consumer experiences to new international markets. TWE will also explore sourcing opportunities outside the U.S. for DAOU, as part of its global sourcing strategy.

Leadership Commentary

Tim Ford, CEO, Treasury Wine Estates said the U.S. is the world's largest wine market. The acquisition cements "our position as a global luxury wine leader. This is a transformative acquisition that will accelerate the growth of our luxury portfolio globally and paves the way for new luxury consumer experiences. DAOU is an award-winning luxury wine business with an outstanding track record for growth and we have grand plans for DAOU to become the next brand with the international scale and luxury credentials of Penfolds. With DAOU, we will be well-positioned to connect with a new generation of wine lovers, combining tradition with innovation, culture-led experiences, and global distribution."

Ben Dollard, President, Treasury Americas said: "We're really excited about the opportunity for the wine category to engage new consumers, and particularly to bring consumers into our portfolio. DAOU has done an incredible job with regards to the experience at DAOU Mountain as well as engaging with younger wine consumers across the country, and we see very significant opportunity to take that experience globally."

Georges and Daniel Daou, Founders of DAOU said: "The last frontier has always been international, and as part of the Treasury Wine Estates portfolio, we have unlocked the potential to be amongst the highest-end wines for consumers to enjoy globally. In Treasury Wine Estates, we have found a partner that not only understands the value of our brand and the premium assets we have cultivated but also the importance of ensuring that we maintain a relentless focus on quality and craftsmanship as we step into our future. Both companies are change leaders and by joining forces, we will continue to boldly disrupt the industry and bring the very best in wine and luxury experiences to consumers around the world."

Other Transaction Details

The acquisition is expected to be completed by the end of 2023 (subject to U.S. anti-trust approval), includes the DAOU brand, DAOU Mountain Estate and hospitality site, four boutique luxury wineries and around 400 acres of vineyards in the coveted Adelaida District of Paso Robles.

Georges and Daniel Daou will remain engaged and highly involved in the business: Georges as Founder and Daniel as Founder and DAOU Chief Winemaker.

TWE's financial advisor for this transaction is PJT Partners and its legal advisor is Davis Wright Tremaine. DAOU's financial advisor is Centerview Partners LLC and its legal advisor is Sheppard Mullin.