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Butterfly Equity, a private equity firm focused on the food and beverage sector, has announced a definitive agreement to acquire The Duckhorn Portfolio, a luxury wine producer, in an all-cash transaction valued at approximately $1.95 billion.

This marks Butterfly's first take-private acquisition and is expected to enhance its diverse portfolio, which includes brands such as Milk Specialties and QDOBA.

Under the terms of the agreement, Duckhorn stockholders will receive $11.10 per share, representing a 65.3% premium over the company's average share price over the past 90 days.

Following the completion of the transaction, Duckhorn will transition to a privately held entity, maintaining its headquarters in St. Helena, California.

Duckhorn, established in 1976, is recognised for its premium wine brands, including Duckhorn Vineyards, Decoy and Kosta Browne. The company distributes its wines globally, reaching consumers in over 50 countries.

With this acquisition, Butterfly aims to leverage its expertise in the food and beverage sector to support Duckhorn's growth objectives and expand its market presence.

The transaction is anticipated to close this winter, pending customary conditions such as stockholder approval and regulatory clearances. Notably, Duckhorn's board has approved the deal, and stockholders representing a majority of voting power have agreed to support the transaction.

A 45-day 'go-shop' period is also in place, allowing Duckhorn to consider alternative buying proposals.

Adam Waglay, co-founder and co-CEO of Butterfly, said: “This is an incredible opportunity, and we look forward to bringing our specialized expertise and deep food and beverage network to bear to help amplify and accelerate the company’s mission to have their wine poured wherever fine wines are served throughout North America and the world”.

The Duckhorn Portfolio's established reputation and extensive distribution network position it well for future growth, particularly as consumer preferences shift toward high-quality, luxury products.

The Duckhorn Portfolio is set to release its financial results for the fourth quarter and fiscal year 2024 later today, although an earnings call has been canceled due to the announced acquisition.

Financial advisory for Duckhorn is being provided by J.P. Morgan Securities LLC, while Butterfly is advised by KKR Capital Markets LLC.

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