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Published:  23 July, 2008

BRL Hardy's US joint venture, Pacific Wine Partners, has bought Blackstone, the California-based wine business, for US$140million (A$290million). BRL Hardy will provide around A$145million as its 50% share of the purchase, which includes the Blackstone brand and winery business in Sonoma County. "Blackstone is a great strategic fit for Pacific Wine Partners and will significantly strengthen its presence in the premium California wine segment," said BRL Hardy's managing director, Stephen Millar. "It is one of the larger and fastest-growing premium wine brands in the US, already with annual sales of more than 500,000 cases and sales growth in the six months to 30 June 2001 of 45% over the previous corresponding period," he said. "Blackstone will be an ideal partner for our rapidly-growing Banrock Station brand." BRL Hardy (Australia's second largest wine company) and Constellation Brands (the second largest wine company in the US) began their Pacific Wine Partners joint venture in August. Millar said the acquisition by the joint venture resulted from a rigorous review of current opportunities in the US in the $100million to $300million range. "A strong-selling brand such as Blackstone is an important component of our US strategy. Pacific Wine Partners can now build a powerful five million case per annum US wine company within the next five to ten years," said Millar. He added that the purchase price represents a reasonable multiple of less than 12 times earnings before interest and tax. The acquisition is expected to increase BRL Hardy's earnings per share and provide a good return on investment in the first full financial year following the purchase. Prior to the Blackstone acquisition, Pacific Wine Partners' main start-up assets were a major winery in Monterey County, California; the expanding Farallon US wine brand; three large coastal California vineyards; and US distribution rights to BRL Hardy wine brands. The BRL Hardy brands in Pacific Wine Partners' start-up portfolio include Hardy's, Banrock Station, Leasingham, Barossa Valley Estate and Chateau Reynella from Australia; Nobilo brands from New Zealand; and La Baume from France. Pacific Wine Partners president and CEO Jos F Fernandez said: "This acquisition creates a powerful self-sustaining premium wine business for both BRL Hardy and Constellation Brands, which is ideally placed to sell quality Australian wine in the US and produce quality US wines for the US market." The deal is expected to close (subject to necessary government approvals) in mid-October 2001.