Oakville, Ontario, February 19, 2015 – Diamond Estates Wines and Spirits Inc. (TSXV: DWS) and The Kirkwood Group Ltd. are pleased to announce that they have completed the integration of their respective agency businesses and have secured an operating facility to finance the working capital for Kirkwood Diamond Canada Partnership (“KDC”).
As part of carving out the KDC credit facility, Diamond Estates restructured its debt to a more conventional lending model.
The merger brought together two of Canada’s leading beverage alcohol agencies to form a single operating entity of superior scale and diversification. A combined sales force of complementary strengths now distributes an augmented portfolio of international wine, spirits and beer brands across Canada.
Meridian Credit Union (“Meridian”) is providing KDC with a $3M operating line for accounts receivable and inventory, with a margin limit of $2M on the latter. Each partner has provided $750,000 in capital, for total funding available to the partnership of $4.5M. KDC acquired $4M of inventory from the partners effective January 1, , 2015. For the period from October 1, 2014 – December 31, 2014, the partners transacted in their respective companies but transferred the revenues and expenses to the benefit of the partnership. Diamond Estates will be consolidating the partnership’s results in its financial statements as of October 1, 2014.
Concurrent with this transaction, Diamond Estates has reorganized its debt with Meridian to reduce its operating facility from $13M to $10M. The margin limit for inventory decreases to 70% to a maximum of $8.5M. $2.75M of new term debt has been issued, with $1.5M of it at 4.99% amortized over 10 years and the remainder at 12% amortized over three years. The result is a reduction in short-term liabilities that improves the current working capital position of the Company.
“The credit facility is the final piece that allows KDC to operate independently of its partners. With the integration of the sales, marketing, finance and operating functions, the merger is substantively complete. We are now able to focus on winning new business as a result of the opportunities that our scale brings to the market,” said Gordon Haist, CEO of Kirkwood Diamond Canada. J. Murray Souter, CEO of Diamond Estates, stated, “With the rapid integration of our two businesses, Diamond Estates will now see the synergistic benefits flow to its bottom line. The new credit facilities are further evidence of the confidence that our lender has in Diamond’s financial turnaround.”
About Diamond Estates
Diamond Estates Wines and Spirits Inc. is a producer, marketer and distributor of wines, spirits, cider and beer in Canada. The company operates two wineries in the Niagara region of Ontario producing VQA and blended wines under such well-known brand names as 20 Bees, EastDell, Diamond Estates Cellars, Dois Amigos Dan Aykroyd, Benchmark, Riders Valley and Seasons. The company also proudly represents and imports several fine wines and spirits from around the world and serves as the marketing and sales agent for these brands in all regions of the country with a dedicated sales force. For further information on the company, please visit the company’s SEDAR profile at www.sedar.com.
About The Kirkwood Group
The Kirkwood Group is a national sales and marketing agency representing producers of premium and prestige wines, spirits, beers and refreshment beverages. A Canadian, family-owned business, they are dedicated to building strong relationships and effectively communicating their suppliers’ brand messages with passion and care, a vision instilled within the organization by agency founder and industry icon, the late Brian Kirkwood. Formed and incorporated in 1998, the company is headquartered in Oakville, Ontario.
For further information about Diamond Estates, please contact:
J. Murray Souter
President & CEO
905 641 1042 Ext 234
For further information about Kirkwood Diamond Canada, please contact:
Chief Executive Officer
905 849-4346 ext22
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 release.
Forward Looking Statement
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 Diamond Estates Wines and Spirits Inc., the Kirkwood Group, or the proposed partnership’s (the “parties”) 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 forwardlooking 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 ability of the parties to complete the transaction; the economy generally; consumer interest in the services and products of the joint venture; financing; competition; and anticipated and unanticipated costs. While the parties acknowledge that subsequent events and developments may cause its views to change, the parties specifically disclaim any obligation to update these forward-looking statements. These forwardlooking statements should not be relied upon as representing the views of either party as of any date subsequent to the date of this press release. Although the parties have 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. Closing of the transaction remains subject to the final approval of the TSX Venture Exchange