An analyst says wine company Delegat's Group will be able to leverage off its existing investment in sales and marketing and other infrastructure with its purchase of an Australian winemaker.
Delegat's has paid about $30 million for Barossa Valley Estate, its first offshore acquisition.
The purchase includes a modern 5,000 tonne winery, a 41-hectare vineyard in the heart of South Australia's Barossa Valley as well as grape grower supply contracts.
The Barossa Valley is internationally recognised for producing world-class Shiraz.
Managing director Jim Delegat says his company plans to invest further in its Barossa purchase.
"Clearly we will want to acquire vineyards, plant vineyards and build inventory in order to deliver substantial future sales growth."
The purchase is being funded by debt, and Delegat's is acquiring the Barossa Valley Estate and E&E brands.
Craigs Investment Partners analyst Arie Dekker says the group appears to have bought well, having acquired the assets out of receivership.
He says the purchase gives it a good opportunity to leverage off the sales and distribution infrastructure it has built up.
Mr Dekker says the group has had strong cash flows, has paid down debt and consolidated existing New Zealand investment, making the balance sheet stronger than it was three or four years ago.
"The size of this acquisition means that it should be easily absorbed in the current balance sheet."
Delegat's Group owns Marlborough wine company Oyster Bay and Delegat's Wine Estate.
