D’Ont Poke the Bear Wines and Ciders
NIAGARA-ON-THE-LAKE, Ontario (May 7, 2024) - Diamond Estates Wines & Spirits Inc. (TSXV:DWS) (“Diamond Estates” or the “Company”) is pleased to announce that it will be distributing D’Ont Poke the Bear (“DPTB”) wines and ciders throughout Canada.
To facilitate the distribution of these products, the Company has agreed to purchase DPTB inventory from Generations Wine Company Limited (“GWCL”) and has entered into a licensing agreement (the “Licensing Agreement”) with 3346625 Canada Inc., a corporation controlled by Mr. Pierre-Paul Lassonde (“Lassonde Family Holding”). Lassonde Holding has acquired from GWCL the brand names and trademarks associated with DBTB.
Diamond Estates has agreed to purchase the DPTB inventory and provide other future consideration for a total estimated cost of $2.5 million over a period of 60 months. The estimated consideration assumes the historical sales of DPTB products continues at its current rate.
Pursuant to the Licensing Agreement, the Company has obtained from Lassonde Family Holding the rights to manufacture, market, distribute and sell DPTB products, in exchange for a 10% royalty on all products sold. The Licensing Agreement is for an initial five year term, subject to an additional five year renewal option. The Company also has the right to purchase the DPTB brand names and trademarks from Lassonde Family Holding under certain conditions.
The entering into of the Licensing Agreement with Lassonde Holding may be considered a related party transaction within the meaning of TSXV Policy 5.9 and Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Company is relying on exemptions from the formal valuation and minority approval requirements of MI 61-101, as neither the fair market value of the subject matter, nor the fair market value of the consideration for the transaction, insofar as it involves related parties, exceeds 25% of the Company’s market capitalization. Further details will be provided in the Company's material change report to be filed on SEDAR.
About D’Ont Poke the Bear
D’Ont Poke the Bear was first launched in 2017 by two industry veterans (Allan Jackson and Andrew Von Teichman). Andrew and Allan were both bullied as children. Andrew wore an eye patch for a period of time which inspired the brand name and the eye patch worn by the Bear. This created a compelling story and propelled the brand to a top 10 selling VQA wine company. The “Bear” has now donated over $125,000 to Kids Help Phone. The Brand is sold in nearly every province across the country with Ontario as it’s key market. The wines are 100% VQA and the cider is made from locally sourced apples.
Benefits of the Transactions
The transaction with Diamond Estates is expected to be accretive to Diamond's current winery business, with incremental revenue, gross margin and greater capacity utilization. D’Ont Poke the Bear will immediately become Diamond’s second largest wine and cider brand and will benefit from a larger salesforce in the LCBO, Grocery and Direct to Consumer channels.
Andrew Howard, CEO of Diamond, states, "We are pleased to be adding D’Ont Poke the Bear wines and ciders to our portfolio. Despite a tough year for the wine and cider industries in 2023, these brands and our Diamond brands outpaced the industry over the past 12 months. The additions to our portfolio will make us a stronger player in the marketplace and will significantly improve our business results. Additionally, the anti bullying cause the brand supports will make our team proud and I look forward to building on the contributions to Kids Help Phone. I admire what Allan and Andrew have built and I look forward to working together with them through the transition and into the future as they stay involved to build on this tremendous success”.
Allan Jackson reflected that “this transaction comes on the anniversary of my 50th year in Canadian winemaking and I am very proud to see the Bear find a new home with the outstanding team at Diamond estates.”
Andrew Von Teichman went on to say “Allan and I have bootstrapped our way through 14 exciting years together and have grown the Bear to annual sales of over 720,000 bottles/cans. The Diamond team is poised and positioned to take the Bear to the next level, while maintaining the core social responsibility of bully prevention, something near and dear to our hearts.”
Issuance of Deferred Share Units
The Company also announced that it has issued deferred share units (“DSUs”) to its directors as of today. Under the DSU plan of the Company, an aggregate of 232,894 DSUs have been issued by the Company to non-executive directors in settlement of $44,250.00 of deferred directors' compensation. The DSUs are to be settled in common shares of the Company when the director retires from all positions with the Company.
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 four production facilities, three 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, Shiny Apple Cider, Fresh Wines, 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, Gabriel Meffre, and Andre Lurton wines from France, Merlet and Larsen Cognacs from France, Kaiken wines from Argentina, Blue Nun and Erben wines from Germany, Calabria Family Estate Wines, McWilliams Wines and Joiy Wines from Australia, Saint Clair Family Estate Wines and Yealands Family Wines from New Zealand, Cofradia Tequila from Mexico, Maverick Distillery spirits (including Tag Vodka and Barnburner Whisky) from Ontario, Talamonti, Cavit and Cielo wines from Italy, Catedral and Cabeca de Toiro wines from Portugal, Edinburgh Gin, Tamdhu, Glengoyne and Smokehead single-malt Scotch whiskies from Ian McLeod Distillers in Scotland, Islay Mist, Ryelaw, and Waterproof whiskies from MacDuff International in Scotland, C. Mondavi & Family wines including C.K Mondavi, Charles Krug, and Flat Top Hills from Napa Valley, Wize Spirits, Hounds Vodka, Walter Caesars, Glen Breton Whisky and Valley of Mother of God Gins from Canada, Bols Vodka from Amsterdam, Warsteiner Beers from Germany, Koyle Family Wines from Chile, Rossi D’Asiago Limoncello from Italy and Becherovka from Czechoslovakia.
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 Diamond Estates Wines and Spirits Inc. 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. Such forward-looking statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to: the performance of the DBTB brands and products; the economy generally; consumer interest in the services and products of the Company; financing; competition; and anticipated and unanticipated costs. 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.
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
