Australia's Treasury Wine Estates said on Tuesday it has entered into a deal to buy luxury wine brand DAOU Vineyards based in Paso Robles, California for $900 million in cash.
It could pay an additional $100 million if certain targets are met, Treasury Wine added.
Inclusive of cost synergies of more than $20 million, the acquisition is expected to be mid to high-single-digit earnings per share (EPS) accretive in fiscal 2025, the first year of Treasury Wine owning DAOU.
The company plans on funding the acquisition through an equity raise of A$825 million ($525.53 million).
Treasury Wine, which had a trading halt earlier in the day, also announced an A$157 million placement of new shares in the company will be issued to the existing owners of DAOU.
The company intends to establish $311 million of debt via a new $350 million acquisition bridge facility to expedite funding for the acquisition.
($1 = 1.5699 Australian dollars)
(Reporting by Roushni Nair in Bengaluru; Editing by Shailesh Kuber and Krishna Chandra Eluri)
