Italian Wine Brands, the first non-cooperative Italian wine group, with a turnover of over 400 million euros, has reached an agreement for the acquisition of 85% of the share capital of Enovation Brands, a historic wine importing company Italians in North American territory 45% owned by the brothers Giovanni and Alberto Pecora (co-founders and operational managers of the company) and 55% by Norina srl (Pizzolo family), based in Miami and widespread distribution throughout the territory national, both on the large-scale distribution channel and on the Horeca channel. The equity value agreed between Italian Wine Brands (which will use its own liquid assets without resorting to specific and dedicated forms of dedicated financing) and the sellers for the purchase of 85% of the share capital of Enovation is equal to 22 million dollars, valuation corresponding to an equity value for 100% of the company equal to 25.9 million dollars. In the period between June 2020 and June 2021, Enovation achieved a turnover of 32.2 million dollars, with 82% of sales revenues achieved in the US and 18% in Canada. In the same period, Enovation achieved an EBITDA of 3.2 million dollars and a net book profit of 3.4 million dollars, while the net financial position as at 30 June 2021 was equal to 100,000 dollars.
As stated in the press release issued by Italian Wine Brands, there are two deferred and conditional execution contracts, which provide for the purchase, directly or through a company controlled by it, respectively of the entire stake held by Norina in the capital of Enovation (55%) and a stake in the share capital of Enovation, equal to a total of 30% of the same, owned by the Pecora brothers. Following the completion of the transaction, Italian Wine Brands will hold, directly or indirectly, an equity investment equal to 85% of the share capital of Enovation, Giovanni Pecora will hold a stake equal to 10% and Alberto Pecora will hold a stake equal to 5%. The agreements also provide that the payment of a portion equal to 20% of the price, or 4.4 million dollars, is conditional on the achievement – in 2022 and 2023 – of increasing EBITDA results. The agreements between the parties also provide for earnout mechanisms in favor of the brothers Alberto and Giovanni Pecora in the event of highly positive results of the company to be achieved by 31 December 2024. The execution of the contracts is subject to the occurrence, by 30 April 2022, of some conditions precedent, including the positive outcome of the due diligence activity that will be carried out by Italian Wine Brands with specific regard to the authorizations, licenses of ownership of Enovation and the obtaining of the consents of the competent US authorities for the change of the team social.
Among the immediate revenue synergies generated by the operation, Enovation will certainly benefit from the distribution to its customers of new references of red wines, made in particular in Puglia and Piedmont, where Italian Wine Brands owns its own production cellars, proposing, to the at the same time, Enovation brand products on international markets managed through its own commercial network. With regard to cost synergies, possibilities for reducing the purchase prices of raw materials will be explored, linked to the greater purchase volumes achieved at group level. The operation also confirms the propensity of Italian Wine Brands to both organic and external growth, this being the fourth operation concluded in less than four years after Svinando.com, Raphael Dal Bo AG, Enoitalia Spa.
“One of our products, with our own brand, everywhere: this is the vision that animates the people of Italian Wine Brands, and which in recent years has led us to invest both in the development of products and production capacity, and in the distribution chain, for directly oversee the main markets. Investments and acquisitions in production in Piedmont, Puglia (Cantine Giordano) and Veneto (Enoitalia) and in distribution with Svinando, Raphael Dal Bo and now Enovation Brands go in this direction. This is the second foreign acquisition of Italian Wine Brands, after Raphael Dal Bo in 2020. Two key markets (USA and Switzerland) for Italian wine and for Italian Wine Brands, with still unexpressed growth potential. Thanks to all the people of Italian Wine Brands and to the new partners of Enovation Brands, who shared the aggregation and growth project of our group, which today represents the largest private Italian company by turnover “, comments Alessandro Mutinelli, president of Italian Wine Brands. “My brother Alberto and I are thrilled to join the first Italian private wine group. It is an important milestone for Enovation Brands, a recognition of the work done in recent years by our entire team in the USA. Now a new chapter is opening, a new starting point, for even more ambitious goals, which we will share with the whole family of Italian Wine Brands “, comments Giovanni Pecora, CEO of Enovation.