Diamond Estate Wines & Spirits Inc. Announces Collaboration with Renaissance Wine Merchants
NIAGARA-ON-THE-LAKE, Ontario--Diamond Estates Wines & Spirits Inc. (TSXV: DWS) (“Diamond Estates” or the “Company”) announces today, through its commercial division, Trajectory Beverage Partners, a significant development that will strengthen its Western Canada business. The Company has entered into a business collaboration agreement (the “Agreement”) with Renaissance Wine Merchants Ltd. (“Renaissance”) to augment each parties’ capabilities in Manitoba, Saskatchewan, Alberta and British Columbia (the “Territory”). Pursuant to this Agreement, Trajectory Beverage Partners and Renaissance have agreed to manage their western salesforces under the leadership of Renaissance for the sale and marketing of all the beverage alcohol products that Trajectory Beverage Partners currently represents or for which it will gain representation in the Territory.
“Our two companies share a common vision, culture and mutual respect for the accomplishments each company brings to the party. This relationship will make us both stronger and more capable - a great foundation for a potential merger.”
The collaboration seeks to leverage the expertise and resources of both companies to provide our suppliers with a more comprehensive and competitive suite of services. The Renaissance management team will combine the salesforces of both parties and lead a bolstered team in close partnership with Trajectory’s national supplier activities.
The Agreement commences November 13, 2023 and will continue for an initial six-month period, renewing automatically for subsequent six month terms unless cancelled in accordance with its terms.
In addition to the Agreement, the two companies have signed a memorandum of understanding whereby they agree to discuss the opportunity for a business combination of Trajectory Beverage Partners and Renaissance Wine Merchants. Initial conversations to date confirm shared core missions and values dedicated to delivering superior results for their customers, employees, stakeholders and shareholders. A potential merger would create material synergies and improve the standing and reach of the combined national business.
We will continue to keep stakeholders informed about the progress of both the Agreement and discussions between the parties concerning a potential business combination.
In addition, in accordance with the terms of the Agreement, Trajectory Beverage Partners can also exercise a put option before May 1, 2024 to sell its agency business in the Territory to Renaissance (the “Put Option”). The purchase price would be determined pursuant to a formula that takes into account trailing gross margin and commissions revenue, which purchase price the Company currently estimates would be an amount between $3 million and $4 million. It should be noted that this is an estimate only, that the purchase price cannot be determined with any degree of certainty at this time, and there is no guarantee that the actual purchase price will be within this estimate.
“We are thrilled about going into business with Renaissance Wine Merchants,” said Andrew Howard, President and CEO of Trajectory. “Our two companies share a common vision, culture and mutual respect for the accomplishments each company brings to the party. This relationship will make us both stronger and more capable - a great foundation for a potential merger.”
Jon Watson, Director of Renaissance, added, “We are excited about the opportunities this relationship will bring. With sales coverage in every province combined with strong sales leadership and experience in each region, a potential merger would satisfy our search for national capabilities. We believe that our combined strengths will enable us to better serve our customers and partners across Canada.”
About Diamond Estates Wines and Spirits Inc.
Diamond Estates Wines and Spirits Inc. is a producer of high-quality wines and ciders as well as a sales agent for over 120 beverage alcohol brands across Canada. The Company operates five production facilities, four in Ontario and one in British Columbia, that produce predominantly VQA wines under such well-known brand names as 20 Bees, Creekside, EastDell, Lakeview Cellars, Mindful, Queenston Mile, Shiny Apple Cider, Fresh, Proud Pour, Red Tractor, Seasons, Serenity and Backyard Vineyards.
Through its commercial division, Trajectory Beverage Partners, the Company is the sales agent for many leading international brands in all regions of the country as well as being a distributor in the western provinces. These recognizable brands include Fat Bastard, Meffre, Pierre Chavin and Andre Lurton wines from France, Brimincourt Champagne from France, Merlet and Larsen Cognacs from France, Kaiken wines from Argentina, Blue Nun and Erben wines from Germany, Calabria Family Estate Wines and McWilliams Wines from Australia, Saint Clair Family Estate Wines and Yealands Family Wines from New Zealand, Storywood and Cofradia Tequilas from Mexico, Maverick Distillery spirits (including Tag Vodka and Barnburner Whisky) from Ontario, Magnum Cream Liqueur from Scotland, Talamonti and Cielo wines from Italy, Catedral and Cabeca de Toiro wines from Portugal, Waterloo Beer & Radlers from Canada, Landshark Lager from the USA, Edinburgh Gin, Tamdhu, Glengoyne and Smokehead single-malt Scotch whiskies from Scotland, Islay Mist, Grand MacNish and Waterproof whiskies from Scotland, C. Mondavi & Family wines including C.K Mondavi & Charles Krug from Napa, Wize Spirits, Hounds Vodka and Valley of Mother of God Gins from Canada, Bols Vodka from Amsterdam, Collective Arts beers, spirits and RTDs from Ontario, Koyle Family Wines from Chile and Pearse Lyons whiskies and gins from Ireland.
Forward Looking Statements
This press release contains forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “estimates”, “intends”, “anticipates” or “does not anticipate”, or “believes” or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company and the matters discussed herein to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this press release. Forward-looking statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to: the economy generally; consumer interest in the services and products of the Company; financing; competition; anticipated and unanticipated costs; and the anticipated performance of the Company. The estimate of the purchase price for the Put Option is a forward looking statement, and is based on estimates of future margin and commission revenue. While the Company acknowledges that subsequent events and developments may cause its views to change, the Company specifically disclaims any obligation to update these forward-looking statements. These forward-looking statements should not be relied upon as representing the views of the Company as of any date subsequent to the date of this press release. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
Contacts
For more information about Diamond Estates:
Andrew Howard
President & CEO
Diamond Estates Wines & Spirits Inc.
ahoward@diamondwines.com
Ryan Conte
CFO
Diamond Estates Wines & Spirits Inc.
rconte@diamondwines.com
