Search Fund Deals in the Wine Industry

searcher profile

September 14, 2022

by a searcher from IESE Business School in Bilbao, Biscay, Spain

Hello everyone!

Does anyone have experience or knowledge about deals in the wine industry? Specially interested in learning about deals conducted by search funds and the fit with the SF model ( EV/EBITDA ratios, FCF conversion, Capex).

Thanks!

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commentor profile
Reply by an investor
from University of Nebraska in Austin, TX, USA
I've seen some really interesting companies that service the wine industry (testing of plants & wine, wine manufacturing equipment, white labeling for wine, distributor of various wine). Any company that provides solutions to the industry is interesting to me (B2B services). Wineries itself are much less interesting and more challenging in my opinion. They are real estate + manufacturing with weather exposure risk meaning cash yield on assets is super low relative to a pure operating business. It's also a 'passion' industry where people stay in industry because they love it, not because it's a good business...I tend to avoid spaces like that. Tough to compete with lots of folks who don't care if they make money. Also difficult to differentiate your wine, 10,000+ options, low margin, etc.
commentor profile
Reply by a searcher
from Dartmouth College in Lebanon, NH, USA
I spent some time here early on in my search and found several attractive businesses, although none of the sellers I spoke with were actively seeking exits at the time.
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