Treasury Wines (TWE) has announced the acquisition of Paso Robles luxury wine business, DAOU Vineyards (DAOU) for US$900m (A$1.4 billion), funded by equity and debt.
“The acquisition is in line with TWE’s premiumisation and growth strategy and will strengthen a key gap in Treasury Americas portfolio,” Raymond said.
“Importantly, DAOU has generated solid earnings growth and is a high margin business.
“TWE has consequently upgraded its margins targets.
“The acquisition is earnings per share (EPS) accretive from financial year 2025 and more than US$20 million of cost synergies are expected by financial year 2026.
“We have upgraded our forecasts.
“On a financial year 2025F PE of 17.5x, TWE is trading at a material discount to its 5-year average of approximately 25x and we maintain an Add rating.
“The key near-term catalyst is China removing the tariffs on Australian wine imports,” Raymond said.
Treasury Wine Estates (TWE) – last 12 months
Source: nabtrade
Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regard to your circumstances.
