Butterfly Equity completes acquisition of Duckhorn portfolio in $1.95bn all-cash deal

Butterfly Equity, a Los Angeles-based private equity firm specializing in the food and beverage sector, has finalized its acquisition of The Duckhorn Portfolio, North America’s premier luxury wine company. The transaction, valued at approximately $1.95 billion, reflects Butterfly’s strategy to strengthen its footprint in the food and beverage industry. Duckhorn stockholders will receive $11.10 per share in cash, a 65.3% premium on the 90-day average share price leading up to October 4, 2024.

Under the agreement, The Duckhorn Portfolio’s common stock has ceased trading and will no longer be listed on the New York Stock Exchange, transitioning the company to private ownership.

The Duckhorn Legacy and Global Reach

Founded in 1976 by Dan and Margaret Duckhorn, the company has grown to become a leading luxury wine producer. Duckhorn’s portfolio boasts eleven prestigious winery brands, including Decoy, Kosta Browne, and Goldeneye, spanning a wide range of varietals with prices from $20 to $230. With over 2,200 acres of vineyards across 38 estate properties, the company sources grapes from premier regions such as Napa Valley, Sonoma County, and Washington State.

Its global footprint is equally impressive, with wines distributed across five continents and over 50 countries, making it a key player in the international luxury wine market.

Butterfly’s Strategic Vision

Butterfly Equity’s Co-CEO Adam Waglay emphasized the importance of Duckhorn’s reputation for quality and craftsmanship. He expressed excitement about leveraging Butterfly’s expertise to expand Duckhorn’s global reach both organically and through strategic acquisitions. He underscored Butterfly’s commitment to enhancing value for its portfolio companies by utilizing a data-driven investment approach and operational strategies.

“Duckhorn has established a remarkable legacy in the luxury wine sector,” Waglay said, highlighting plans to amplify the company’s market presence and growth trajectory.

Butterfly, founded in 2016, focuses on investments within the “seed-to-fork” food ecosystem, with a portfolio valued at approximately $8 billion. Other investments include Chosen Foods, MaryRuth Organics, and QDOBA.

Leadership Perspective

Deirdre Mahlan, President and CEO of The Duckhorn Portfolio, welcomed the partnership with Butterfly, citing its track record of fostering growth for portfolio companies. Mahlan noted that the enhanced resources and expertise from Butterfly would enable Duckhorn to further scale its operations and continue its legacy of innovation.

“This partnership marks an exciting new chapter for The Duckhorn Portfolio,” Mahlan stated, adding that the acquisition aligns with the company’s long-term strategic goals.

Transaction Details and Future Outlook

The transaction was unanimously approved by Duckhorn’s Board of Directors and includes a customary 45-day “go-shop” period, during which Duckhorn may consider alternative offers. While no superior proposals have been disclosed, the provision reflects transparency in the acquisition process.

Butterfly’s acquisition of Duckhorn signifies a broader trend of private equity investments in the luxury wine sector. The deal positions both entities to capitalize on growing global demand for premium wines, leveraging Duckhorn’s strong fundamentals and Butterfly’s operational expertise.