overview for privateequity investments - strategic...

Copyright 2010 Bacchus Capital Management

Strategic capital and expertise for the wine industry

Overview for

Private Equity Investments

Prepared: September 2011

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In classical mythology, Bacchus is the god of wine, inspirer of ritual madness and ecstasy, and a major figure of Greek mythology.

He was also known as the Liberator, freeing one from one’s normal self, by madness, ecstasy, or wine.

The divine mission of Bacchus was to bring an end to care and worry.

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Overview

► Bacchus Capital Management uniquely

provides strategic capital with flexible financing and deep industry expertise for the wine category.

► Bacchus looks to partner with premier wineries to grow and develop their brands.

► Our equity investments range from $2.5 to $7.0 million. On larger deals, Bacchus is able to co-invest with partnerships it has developed.

► Principals with unparalleled wine industry experience and financial expertise assist portfolio companies in achieving their strategic objectives.

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Principals

► Bacchus Capital Management was founded and

is run by Sam Bronfman, Peter Kaufman and Henry Owsley. Quinton Jay is a Managing Director.

► Extensive wine industry experience: executive positions at Seagram Chateau and Estates, Diageo Global Wines, Artesa Vineyards and Winery and Bonny Doon Vineyard.

► Kaufman/Owsley are prominent investment bankers with significant experience in valuations, credit analysis, and financial complexities.

Sam Bronfman Peter Kaufman

Henry OwsleyQuinton Jay

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Experience and Relationships

► Deep and diverse wine industry experience with a track record of success in the category.

► Comprised of “blue chip” investors/alliances including Anheuser-Busch/InBev and WJ Deutsch & Sons

– All major wine categories (table, sparkling and specialty wines)

– All major price segments from economy to ultra-premium

– All major growing regions (California, Washington, Canada, Europe, Australia, New Zealand, South America and South Africa)

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BRIDGE FINANCE

Short-term financing in order to close a transaction

REFINANCING

Paying down part or all of an existing loan

CONTROL ISSUES

Liquidity for estate planning or inter-generational and partnership transitions

BacchusBacchusBacchusBacchus Capital ManagementCapital ManagementCapital ManagementCapital Management can

help wineries in a number of areas:

ADDED LIQUIDITY

Extra cash for wineries in order to weather the storm when

banks are “tapped” out

BUY OUTS / GROWTH CAPITAL

Expansion, sales/marketing or direct to consumer initiatives. Provide

financing for acquisitions, strategic or joint venture

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Alternative Financing

SECURED

DEBT

SECURED

DEBT

REAL ESTATE

INVESTMENT

TRUST

REAL ESTATE

INVESTMENT

TRUST

2nd LIEN

DEBT

2nd LIEN

DEBT

PRIVATE

EQUITY

PRIVATE

EQUITY

PROSPROS CONSCONS

Inexpensive Inexpensive Limited to Asset ValueLimited to Asset Value

Expensive, Requires Sale of Land AssetsExpensive, Requires Sale of Land Assets

Liquidity on Top of Asset-Based

Lending, No Ownership Dilution,

Debt Tax Shield

Liquidity on Top of Asset-Based

Lending, No Ownership Dilution,

Debt Tax Shield

Requires Sufficient Collateral Base, Only

Available up to a Certain Cash Flow

Multiple

Requires Sufficient Collateral Base, Only

Available up to a Certain Cash Flow

Multiple

Profitable in Certain Circumstances

because of High Multiples

Profitable in Certain Circumstances

because of High Multiples

Absence of cash coupon does not make

equity “cheaper” than debt, Expensive,

Loss of Control

Absence of cash coupon does not make

equity “cheaper” than debt, Expensive,

Loss of Control

Market Value of Land, Control,

Extensions, and

Repurchase Opportunities

Market Value of Land, Control,

Extensions, and

Repurchase Opportunities

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Advantages of Bacchus Private Equity

2nd Lien Debt2nd Lien Debt

1st Lien Debt1st Lien Debt

EquityEquity

► Seeks control positions in smaller ultra-premium wineries with growth potential

► Bacchus has in-house expertise in – Distribution

– Brand Development

– Operations

► Willing to allow current management to retain some equity and operating role

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Target Private Equity Parameters

Winery Profile

� West Coast Super-Premium wineries

� Positive EBITDA

� Cash Flow Positive

� History or potential for attractive growth

� Talented management team

� Opportunity to enhance brand value, distribution and/or operations

Investment $2.5 to $7.0 million; Bacchus has access to co-investors for amounts beyond that

Exit 5 to 6 years

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Alongside capital, BacchusBacchusBacchusBacchus provides

unparalleled wine industry experience and financial expertise to grow portfolio wineries:

► Strategic and Financial Planning

► Effective Capital Management

► Turnaround, Repositioning Expertise

► Acquisitions, Joint Ventures, New Products

► Marketing, Sales, Direct-to-Consumer Initiatives

► Margin Improvements via Pricing and COGS management

► Strategies to Leverage Distribution including Potential Partnerships with Bacchus investors/alliances

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Summary

► Bacchus Capital Management uniquely

provides strategic capital with flexible financing and deep industry expertise for the wine category.

► Enables wineries to retain equity and borrow beyond the traditional bank-based asset formulas tied to inventory and receivables.

► When requested, Bacchus executives will provide advisory services to borrowers, particularly in the areas of finance, branding and distribution.

► The fund is receiving strong support from secured lenders, financial institutions, and strategic advisors.

4225 Solano Avenue, Suite 668, Napa, CA 94558 | (415) 828-8898

Sam BronfmanManaging Partner

[email protected](650) 322-9926

Sam BronfmanManaging Partner


Rob RupeManaging Director


Rob RupeManaging Director


Quinton JayManaging Director


Quinton JayManaging Director


Peter KaufmanManaging Partner


Peter KaufmanManaging Partner


Henry OwsleyManaging Partner


Henry OwsleyManaging Partner


Strategic capital and expertise for the wine industry

overview for privateequity investments - strategic...

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