Vintage Wine Estates in Santa Rosa acquires large club Vinesse for $14 million

Santa Rosa-based Vintage Wine Estates, with wineries throughout Napa and Sonoma counties and the West Coast, has required “substantially all of the assets” of direct to consumer platform provider Vinesse LLC.

Vinesse, based in Westlake Village, has 60,000 members, Vintage reported, and was founded in 1993.

VWE is acquiring Vinesse for $14 million in cash with a $2.5 million earnout over a three-year period subject to meeting certain revenue and profitability conditions

“We are rapidly expanding our DTC capabilities and Vinesse is an excellent addition to the platform. Vinesse currently outsources virtually all of their operations,” Pat Roney, CEO of VWE, stated in the announcement. “We believe we can create significant cost synergies by bringing wine making and distribution in house and marketing VWE’s brand portfolio through their channels. We also see significant potential opportunities for revenue expansion as we blend the talent of Vinesse’s traditional marketing skills with our digital capabilities, particularly through cross-selling into Vinesse’s channel and upselling our luxury brands to their club members.”

Vinesse has approximately $20 million in revenue, and Roney stated the acquisition equated to about 12 times earnings before interest, taxes, depreciation and amoritization, a common metric for acquisitions. The winery company executive stated his company expects to lower that multiple to less than five times EBITDA over the first 12 months, meaning that the the bottom line of that operation is eyed for improvement.

With approximately $20 million in revenue, Vinesse is 100% owned by Larry Dutra. Vintage stated he is expected to remain with the operations to help continue to grow the business along with other Vinesse leadership.

Dutra acquired full ownership of Vinesse in 2019, after it and a number of other assets were sold with the winding down of Adams Wine Group, the Business Journal reported at the time. The group was a venture that Dutra co-founded in 2004 around the time of the acquisition of Sonoma County’s Adler Fels Winery and its associated Sonoma Estate Vintners custom-winemaking business.

Other Adams Wine Group assets sold in 2019 were Pack n’ Ship Direct, now part of Napa’s DTC Logistics, and AWDirect, now part of Santa Rosa’s Sonoma 980.

In June, Vintage Vintage Wine Estates acquired Southern California-based The Sommelier Co., which provides private and virtual wine and spirits tastings. The deal was the first one since Vintage Wine Estates became a publicly traded company on June 8.

Vintage Wine Estates on Tuesday released its first earnings since going public this spring, reporting net income of $4.1 million for fiscal 2021, a significant improvement over the loss of $14.7 million in the prior year, The Press Democrat reported.

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