tag:blogger.com,1999:blog-941731830705031230.post3861128701619468067..comments2024-03-11T03:24:58.582-07:00Comments on SVB on Wine: How Much is Your Winery Worth Today?Rob McMillan rmcmillan@svb.comhttp://www.blogger.com/profile/12396624790174552807noreply@blogger.comBlogger12125tag:blogger.com,1999:blog-941731830705031230.post-29225738299080355682020-08-14T09:14:29.715-07:002020-08-14T09:14:29.715-07:00Gerald - the approach is the same. There are just ...Gerald - the approach is the same. There are just fewer assets. Its a combination of EBITDA times a multiple, or Sales times a multiple and somewhere in the mix growth rate comes into play with higher growth getting a better return than low growth - generally speaking. EBITDA is always the most important factor as well as adjusted market multiples.Rob McMillan rmcmillan@svb.comhttps://www.blogger.com/profile/12396624790174552807noreply@blogger.comtag:blogger.com,1999:blog-941731830705031230.post-78564504684060077602020-08-12T18:35:28.254-07:002020-08-12T18:35:28.254-07:00Hi Rob
Thanks for this info.
How do you assess the...Hi Rob<br />Thanks for this info.<br />How do you assess the value of a Brand that doesnt have a "Home"?i.e. no Vineyard or Winery, it is a high quality product with solid grower contracts, strong marketing and excellent trade sales over the last 10 years. Would you use a multiple of EBITDA (normalised) alone, or mix in the value of IP, Know How, contracts, relationships, supply chain etc..<br />cheers<br />GeraldAnonymoushttps://www.blogger.com/profile/08567400018957901124noreply@blogger.comtag:blogger.com,1999:blog-941731830705031230.post-64163390566485276542020-03-05T12:30:19.928-08:002020-03-05T12:30:19.928-08:00It's a complex topic and you as a new particip...It's a complex topic and you as a new participant aren't likely to have instinct with valuation. There are many risks involved you should consider before buying. Consider getting someone to advise or represent you in the transaction.Rob McMillan rmcmillan@svb.comhttps://www.blogger.com/profile/12396624790174552807noreply@blogger.comtag:blogger.com,1999:blog-941731830705031230.post-13648671661699786712020-03-03T06:38:50.999-08:002020-03-03T06:38:50.999-08:00Hi Rob,
I'm in the process of potential buying...Hi Rob,<br />I'm in the process of potential buying a vineyard in pope valley and I'm new to the industry. I have visited the site and walk the property but I'm still confused about how to value the property. ie; what components of the vineyard should I take into account and what I should look for, Land, Inventory, Equipment, Cashflow, etc. <br />Thank you in advance for your input. pshindhshttps://www.blogger.com/profile/05020228343327547294noreply@blogger.comtag:blogger.com,1999:blog-941731830705031230.post-38470736450147301462019-08-29T17:34:54.101-07:002019-08-29T17:34:54.101-07:00Glad this is more helpful.Glad this is more helpful.Rob McMillan rmcmillan@svb.comhttps://www.blogger.com/profile/12396624790174552807noreply@blogger.comtag:blogger.com,1999:blog-941731830705031230.post-81793934010585162352019-08-29T17:33:27.464-07:002019-08-29T17:33:27.464-07:00Anon - there is no good answer to your question re...Anon - there is no good answer to your question regarding breakdown of components. <br /><br />A negociant will have a multiple based on sales and brand value. Vineyards can carry a lot of value and drive up multiples so brands and negociants will normally fall below 8x-12x but I don't have any good metrics to cite. <br /><br />I don't know what a monopole is? Is that what happens when a frog lays one egg?Rob McMillan rmcmillan@svb.comhttps://www.blogger.com/profile/12396624790174552807noreply@blogger.comtag:blogger.com,1999:blog-941731830705031230.post-6357936007709611872019-08-29T17:29:41.883-07:002019-08-29T17:29:41.883-07:00It's a little off target to bring climate chan...It's a little off target to bring climate change into the discussion. Practically speaking, there is no analyst that currently can factor that into multiples. There's no denying climate change, but there is no accurate prediction for timing and scope and buyers aren't factoring that into decisions either.Rob McMillan rmcmillan@svb.comhttps://www.blogger.com/profile/12396624790174552807noreply@blogger.comtag:blogger.com,1999:blog-941731830705031230.post-10211171290737505532019-08-29T15:07:13.137-07:002019-08-29T15:07:13.137-07:00Rob, thank you for this! When we spoke at AV growe...Rob, thank you for this! When we spoke at AV growers last IPM meeting, I may have mis-articulated my question. This info is a great help to the overall picture I'm trying to paint for our winery owners. Thank you!Jenhttps://www.blogger.com/profile/05944437190393061125noreply@blogger.comtag:blogger.com,1999:blog-941731830705031230.post-50510161076660389682019-08-27T17:07:36.384-07:002019-08-27T17:07:36.384-07:00Rob-
Thank you for this analysis. It is very inte...Rob-<br />Thank you for this analysis. It is very interesting.<br />Maybe I just missed it, but how would you breakdown the components of a wine business out of the 8x to 12x EBITDA number, between:<br />Intellectual Property<br />Inventory<br />Winery Facility<br />Vineyards<br /><br />Given that different wineries have these in very different ratios.<br /><br />To describe two ends of the football field (Ceteris paribus):<br />What is EBITDA Multiple for a negotiant?<br />What is EBITDA Multiple for a monopole?<br /><br /><br /><br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-941731830705031230.post-85268225616591408492019-08-27T12:43:36.514-07:002019-08-27T12:43:36.514-07:00"Said another way, the buyer is buying 14.7 y..."Said another way, the buyer is buying 14.7 years of profits."<br /><br />This is definitely a 30,000 foot view. Climate change will affect those 14.7 years. Napa Valley Alicante Bouschet or Russian River Rubired may push that timeline out a bit or reverse it altogether. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-941731830705031230.post-75483134569939257902019-08-26T16:18:46.740-07:002019-08-26T16:18:46.740-07:00Thanks for logging in Anti.
True comment. Somethin...Thanks for logging in Anti.<br />True comment. Something will happen though. My understanding it's being held up by a single varietal/beverage which when added together, gives Gallo over 50% share of the sales of that varietal/beverage in the US. That can be fixed as long as Gallo doesn't use the sale to take another bite out of the apple. <br /><br />I'm sure the employees in Constellation are living on a razors edge trying to figure out what to do with supply. It can't be easy.Rob McMillan rmcmillan@svb.comhttps://www.blogger.com/profile/12396624790174552807noreply@blogger.comtag:blogger.com,1999:blog-941731830705031230.post-70659675207115062682019-08-26T13:52:08.915-07:002019-08-26T13:52:08.915-07:00That Constellation/Gallo deal is NOT A DONE DEAL y...That Constellation/Gallo deal is NOT A DONE DEAL yet. Stay tuned...Antihttps://www.blogger.com/profile/10852080361967283585noreply@blogger.com