JOHNSON WINTER & SLATTERY acted for McGuigan Simeon Wines Ltd on its acquisition of Adelaide Hills private winery, Nepenthe Wines, for approximately $23.5 million.
Adelaide-based partner John Goldberg from law firm Cowell Clarke acted for Nepenthe Wines.
JWS’s lead partner on the deal, Gordon Radford, said after about seven weeks’ work, the deal was finalised in a 19-hour overnight meeting on 26 and 27 February, which he described as one of the most “cordial, constructive negotiations that I’ve ever been in”.
Radford said although Napenthe is a very small winery, the deal gave McGuigans — the largest pure wine producer listed in Australia — access to a brand that is known for very good quality wines.
“The majority of [McGuigan’s] sales are in bulk wine, not branded wine,” he said. “The deal [gave] them access to a wine brand in the key premium category … where they really haven’t been represented before. He said it also provided the company a foothold in the Adelaide Hills region, where they previously haven’t had a vineyard.
JWS’s work for McGuigans included conducting due diligence on Nepenthe Wines, which involved assessing 25 distributors worldwide, a vineyard management business and agreements, as well as the intellectual property assets of the firm.
They also had to negotiate the asset sale agreement and the service agreement for Nepenthe founding managing director James Tweddell, who will stay on as general manager of Nepenthe.
To fund the purchase, JWS assisted in the U$25 million US placement, managed by Macquarie Equity Capital Markets. US law firm Pilsbury Winthrop Shaw Pittman LLP assisted with this work.
“The brands and the trademarks, from a legal point of view, were probably the key asset to make sure we had brands securely locked down,” Radford said. Pinsent Masons helped JWS to conduct checks on Nepenthe’s intellectual property and distribution arrangements in the UK. In the US, law firm Dickinson Wright PLLC partner John C Nishi conducted intellectual property work for JWS.
“It was an asset purchase for an operating winery with distribution arrangements all around the world,” he said. “Because you have got so many contracts with grape growers, distributors … there’s a lot of things that need to be transferred over.”
As the target company was family-owned, his team had to be particularly sensitive about the issues of importance to them, including keeping the deal confidential.
“Our due diligence exercise had to be highly focused and efficient,” Radford said. “The family owners did not want word getting out, so they were the ones who had to provide us with due diligence information and so we had to be sensitive to their ability to source and provide information without having access to their employees,” he said.
“There was an absolutely fantastic co-operation between both parties and a real desire to get the deal done,” he said. “We worked through issues not in an adversarial way, we were very much almost sitting on the same side of the table. It was a very fun, constructive deal negotiation.”
As well as Radford, JWS’s team included senior associate Kerry Morrow, and associates Kate Lyttle and Anne Kirk.