Butterfly Equity is taking luxury wine maker Duckhorn private in $1.95 billion all-cash deal

By Ciara Linnane

Duckhorn's stock more than doubles on the news

Butterfly Equity has agreed to acquire Duckhorn Portfolio (NAPA), a luxury wine brand, in an all-cash deal valued at about $1.95 billion, the companies said Monday in a joint statement.

Butterfly, a Los Angeles-based private-equity firm, will pay $11.10 per share in cash, for a premium of about 65.3% over the volume weighted average share price of Duckhorn's common stock over the 90-day trading period ending on Friday, Oct. 4.

Duckhorn, which was founded in 1976, will become a privately held company, producing a portfolio of premium brands, including Duckhorn Vineyards, Decoy, Sonoma-Cutrer and Kosta Browne. It will continue to be headquartered in St. Helena, Calif., and operate 11 winery brands.

The stock more than doubled on the news and was on track for its biggest-ever one-day percentage gain. The stock is now in the black for the year, up 10.5% and is headed for its best-ever year on record, based on data boing back to March 18 of 2021, according to Dow Jones Market Data.

The S&P 500 SPX has gained 20% in the same time frame.

The deal will include a customary 45-day "go-shop" period, during which time it can solicit other bids.

"Through our partnership with Butterfly, we expect The Duckhorn Portfolio will have enhanced resources to build on our strong foundation and to further scale our operations," Duckhorn Chief Executive Deirdre Mahlan said in prepared remarks.

Butterfly, which was set up in 2016, specializes in investing in the "seed-to-fork" food ecosystem in North America with a portfolio that includes Milk Specialties Global, Chosen Foods, MaryRuth Organics, Orgain, Bolthouse Fresh Foods and QDOBA, among others.

The deal is expected to close this winter.

Separately, Duckhorn reported fourth-quarter earnings showing net income of $11.3 million, or 8 cents a share, down from $17.8 million, or 5 cents a share, in the year-earlier period. Adjusted for one-time items, the company had EPS of 14 cents, ahead of the 10-cent FactSet consensus.

Sales rose 7.3% to $107.4 million, also ahead of the $105.0 million FactSet consensus.

From the archive: Duckhorn to buy Sonoma-Cutrer Vineyards for $400 million in big chardonnay play

See: Duckhorn CEO on how the pure-play, exchange-listed wine maker will grow, and adapt to climate change

-Ciara Linnane

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10-07-24 1103ET

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