Diamond Estates To Increase its Interest in its Agency Business to 100%
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NIAGARA-ON-THE-LAKE, ON, April 6, 2017 /CNW/ - Diamond Estates Wines & Spirits Inc. (the "Company" or "Diamond Estates") (http://www.diamondestates.ca) (TSXV: DWS), today announced that it has reached an agreement to acquire the 49.99% interest in its agency business, Kirkwood Diamond Canada ("KDC") currently owned by its joint venture partner, Kirkwood Brands Ltd. The Company will pay $4.4 million to complete the acquisition.
Diamond Estates' management believes that it can add significant value to the agency business through targeted investments that will improve distribution, sales and brand management. The transaction gives Diamond Estates ownership of a business with a seasoned, pan-Canadian sales force and significant unrealized potential given the strong domestic and international brands represented.
"Our agency business has been a very important part of Diamond Estates for 17 years," said Murray Souter, President and CEO. "By bringing this division fully under our umbrella, we are confident that we can improve profitability, which is currently unrealized, through better focus and by capitalizing on the inherent efficiencies present in this operation. We expect this business to represent a growing, reliable, long-term cash flow generator that is complementary to our winery business."
Following the closing of the transaction, which is expected to occur by May 5, 2017, the Company intends to undertake a number of key initiatives to better respond to suppliers' needs in a changing marketplace, leveraging management's distribution experience to reduce working capital requirements and improve overall return on equity.
About Diamond Estates Wines and Spirits Inc.
Diamond Estates Wines and Spirits Inc. is a producer of high quality wines and a sales agent for over 120 beverage alcohol brands across 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 Estates, Diamond Estates Cellars, Dois Amigos, Dan Aykroyd, Benchmark and Seasons. Through its partnership, Kirkwood Diamond Canada, the Company is the sales agent for top selling international brands in all regions of the country as well as being a distributor in the western provinces. These recognizable brands include Fat Bastard wines from France, Kaiken wines from Argentina, Charles Wells beers from England, Hpnotiq Liqueur from France, Anciano wines from Spain, Francois Lurton wines from France and Argentina, Blue Nun wines from Germany, coolers and spirits from Independent Distillers in New Zealand, Brick Brewing from Canada, Evan Williams Bourbon from USA, Flor de Cana rum from Nicaragua, Iceberg Vodka from Canada and many others. For further information on the company, please visit the company’s SEDAR profile at www.sedar.com.
Diamond Estates Wines & Spirits Inc. common shares trade on the TSX Venture Exchange (symbol: DWS). For more information, please contact:
J. Murray Souter
President & CEO
Diamond Estates Wines & Spirits Inc.
905 641 1042 Ext 234
Alan Stratton, CPA, CA
Chief Financial Officer
Diamond Estates Wines and Spirits Inc.
905-641-1042 Ext 225
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 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 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.