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SPAC Craze Goes To Wine Country

Image via Kym Ellis on Unsplash

It's almost every day that we write about a new SPAC deal. January saw the amount of money raised by SPACs jump 20-fold from last January to $24.26 billion, already accounting for 30% of last year's $79 billion raised by SPACs.

While SPAC deals have commonly targeted companies in the electric vehicle space, the list of companies that have gone public through this route is quickly growing.

This week saw an interesting SPAC deal as Vintage Wine Estates has entered into a merger with Bespoke Capital Acquisition Corp. to become a publicly traded company.

Vintage Wine Estates, which was founded 20 years ago, is one of the fastest growing U.S. wine producers with sales of nearly 2 million nine-liter equivalent cases annually. Vintage Wine Estates carries more than 50 brands that range in price from $10 to $150 per bottle.

The winemaker touts profitability every year since inception, with 20% average annual revenue and EBITDA growth since 2010. The combination will see Vintage Wine Estates continue to be run by founder and CEO Pat Roney while the management team will remain in place.

"Our advantaged scale within a highly fragmented wine industry, industry-leading DTC platform that positions us well in a post-COVID consumer world and premium brand portfolio provide a strong foundation to build upon and sustain robust long-term growth," Roney said. "This transaction will not only enable us to invest behind our brands to drive market share where necessary, but it will also fuel the next phase of our rapid growth in the U.S. wine industry."

Vintage Wine Estates will use the combination to expand in the U.S. wine industry, which has seen sustained growth over the past 25 years and has room for more growth, according to the company.

The combination will also bring the experience of former Diageo CEO Paul Walsh, who is the Executive Chairman of Bespoke Capital Acquisition Corp. and will serve as the non-executive Chairman of the combined company.

"After evaluating over 100 companies, we are delighted to have identified VWE as the ideal merger partner," Walsh said. "The Company represents a unique and compelling investment opportunity in the consumer staples space. VWE's well-diversified portfolio of high-quality brands spanning all price points and differentiated omni-channel marketing approach bring great balance."

As SPACs continue to dominate, this is just one of the interesting examples of a company that has been given a fresh boost as it heads to the public markets.

Leftover Crumbs

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  • Martha Stewart fuels new line at Canopy. Following a successful launch last week of Martha Stewart's line of CBD products for pets, Canopy Growth announced the launch of a line of CBD treats for dogs called SurityPro. SurityPro will offer four variations—calm, active, multi and healthy aging, that will come in different flavors from Martha Stewart's line. Canopy said their website had a record week since Martha Stewart's product launch on January 26 as site traffic has increased by triple-digit percentage.

  • McKinsey reaches opioid settlement. McKinsey has agreed to pay $573 million to settle allegations over its role in the U.S. opioid crisis. The settlement with 47 states, the District of Columbia and five territories requires McKinsey to submit thousands of internal documents detailing its business relationship with Purdue Pharma. "They were part of a machine that disrupted, in fact destroyed, lives and families in America," California Attorney General Xavier Becerra said. "Today we hold McKinsey to account."

  • Musk reveals when to buy a Tesla. Tesla co-founder and CEO Elon Musk said in an interview that the quality of the automaker's vehicles may not be as great when they are built during periods of ramping production. "It took us a while to kind of iron out the production process. Friends ask me: 'When should I buy a Tesla?' And I'm like: 'Well, either buy it right at the beginning, or when the production reaches a steady state,'" Musk said. "But during that production ramp, it's super hard to be in vertical climb mode and get everything right on the little details."