Marlborough Lines buys 80pc stake in Yealands Wine Group
Marlborough wine grower Peter Yealands has sold a majority share of his company - Yealands Wine Group - to local electricity supply company, Marlborough Lines.
The lines company paid $89 million for a 80 per cent share of the total shareholding for one of the country's biggest wine companies and exporters.
Yealands said the sale was a "marriage made in heaven".
There were very few wholly locally owned wineries in Marlborough, he said.
"I cannot think of a better majority owner to have than Marlborough Lines."
The entrepreneurial company founder had reduced his majority shareholding from 75 per cent to 15 per cent, with chief executive Jason Judkins holding the remaining 5 per cent.
Minority shareholder Ager Sectus Wine Estates (AWSE) had relinquished its 25 per cent stake in YWG as a result of the sale.
Yealands and Marlborough Lines managing director Ken Forrest jointly announced the sale late Wednesday afternoon.
The sale to Marlborough Lines enabled the company to remain a 100 per cent local business, Yealands said.
"It's been a marvellous day and a long time coming," he said. "A simple way of seeing it is the whole of the Marlborough community now have a shareholding, and will feel part of the ownership."
Months ago Yealands denied the company was for sale, but did not rule out selling parts of the Seddon-based wine company.
He later worked with an advisor to map out the company's future direction, including an initial public offering or selling part of the business.
"Back in December I made a very public announcement that I was looking for an investor to help grow the business ... We pretty much did a global search before we found the investor on our doorstep in Marlborough Lines.
"I couldn't think of anything better."
Yealands said he would remain 100 per cent committed to the company.
"There is no change, I will continue in the same role as founder, and ambassador of the company's wine.
"It's a very large business for a one-man band but I will still do all the things I've always done. But I hope to get out of my office a little more and assist in the winemaking.
"The company is continuing to perform well ahead of forecast with unparalleled demand both domestically and internationally.
"The current vintage is going to be one of the best on record and our 2015 wines our finest yet."
YWG wanted an investor who shared the same beliefs and who would continue to build the business by expanding fruit supply and develop international marketing.
Forrest said the acquisition of a local winery had raised eyebrows initially around the boardroom table.
"Opportunities to invest in the electricity industry are limited and this led us looking at other options," he said. "We believe it is a good investment which will provide increased dividends to our customers, as well as social and economic benefits to the region."
Last year Marlborough Lines, owned by Marlborough Electric Power Board Trust, paid out $50 dividend to each of its 24,500 customers.
"We are very pleased to have the opportunity to acquire an 80 per cent interest in Yealands."
Marlborough Lines carried out a comprehensive independent review of the winery, he said.
"We were impressed with their achievements, particularly in light of their relatively short existence, and with their ambitious plans for growth.
"We are satisfied that this will be as successful investment which will broaden our asset base for the benefit of Marlborough.
"We are pleased we are able to demonstrate our confidence in the future of the region's most important industry."
Marlborough Electric Power Trust chair Ross Inder said the investment "fitted" with the aims of the lines company.
"It fits well with our future objectives to make long-term investments which will produce income which can be returned to our customers."
Inder said there had been strong growth in the company's capital position following sales of assets in Otago and Bay of Plenty.
"The company had no debt and now held over $100 million in cash from investments made outside the region."
The investment returns had been brought back to the region to give customers a significant ownership in an industry which sustained the region, he said.
The lines company liked to invest in substantial assets where it had control rather than scatter the investment capital into minority holdings, he said.
Settlement of the change of ownership was imminent and would not affect day-to-day operations.
Yealands Wines Group had more than 1100 hectares of vines planted and employed 130 staff at its two vineyards in Seddon and Hawke's Bay.
In seven seasons since being established it had become one of the world's top producers of sauvignon blanc, and was recognised internationally for sustainability.
It is the sixth biggest wine exporter in New Zealand, with Yealands wine sold in more than 80 countries around the world. YWG has won numerous awards, the most recent being the Marlborough Pinot Noir Trophy at the International Wine Challenge in London for the second consecutive year.
Yealands is known for his entrepreneurial and innovative zeal which has included using miniature sheep to graze between vines, wine bottled in plastic bottles, and a number of eco-friendly practices. The company was formed in 2008 out of a merger with Ager Sectus Wine Estates in Hawke's Bay, producer of The Crossing and Crossroads Wines.
- The Marlborough Express