The Duckhorn Portfolio Closes Acquisition of Sonoma-Cutrer Vineyards

The Duckhorn Portfolio, Inc. (NYSE: NAPA) (the “Company”) announced the completion, effective April 30, 2024, of its acquisition of Sonoma-Cutrer Vineyards (“Sonoma-Cutrer”), one of the largest and fastest-growing luxury Chardonnay brands in the U.S., from spirits and wine company, Brown-Forman Corporation (NYSE: BF.B) (“Brown-Forman”). The Duckhorn Portfolio has named two Brown-Forman executives to its Board of Directors, Marshall Farrer, Chief Strategic Growth Officer, and Tim Nall, Chief Global Supply Chain and Technology Officer.

The Company finalized the acquisition for the previously announced consideration of approximately $50 million of cash and the issuance of 31,531,532 shares of Company common stock to Brown-Forman.

“We are thrilled to add the acclaimed Sonoma-Cutrer winery brand to our portfolio of luxury winery brands and welcome their talented team,” said Deirdre Mahlan, President, Chief Executive Officer and Chairperson of The Duckhorn Portfolio. “The addition of these iconic and carefully curated wines to our offering broadens our reach in the luxury Chardonnay category and further cements our place as the premier pure-play producer of luxury wine in the US. We believe this acquisition will enhance our ability to deliver a full portfolio of luxury wines to the consumer, and further advance our ambition to drive consistent, profitable growth and create meaningful value for all our stakeholders.”

Since its founding in 1973, Sonoma-Cutrer has become one of California's best-known and fastest-growing luxury Chardonnay winery brands. This acquisition bolsters The Duckhorn Portfolio by significantly elevating the Company’s position within the Chardonnay category, the number one domestic white varietal. The brand strength and scale of this acquisition is expected to extend the Company’s reach to a broader base of consumers and trade partners, further enabling The Duckhorn Portfolio to outpace industry growth.

Key Benefits

• The acquisition is expected to be accretive in the first full fiscal year based on expected run-rate synergies, which are now expected to exceed the Company’s initial estimate of $5 million.
• The Company anticipates additional opportunities to accelerate net sales growth as a result of Sonoma-Cutrer’s complementary placement within the existing brand and varietal architecture and relatively limited account overlap.
• The Company expects further optimization of the grape supply and production model with the addition of 1,121 acres of estate vineyards in the Russian River Valley and Sonoma Coast appellations.
• The Company welcomes Brown-Forman, a leader in beverage alcohol with over 150 years of industry experience, as a well-respected shareholder and looks forward to the contributions of Marshall Farrer and Tim Nall as members of The Duckhorn Portfolio Board of Directors.
• The acquisition terms allow the Company to maintain its current debt leverage ratio, affording the financial flexibility to drive future growth.

About Marshall Farrer