Italian Wine Brands acquires Enoitalia in major merger

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Italian Wine Brands has acquired 100% of Enoitalia for an undisclosed amount, making it Italy’s second largest wine company by annual revenue.

CEO of Italian Wine Brands, Alessandro Mutinelli

Prior to the merger, IWB was the seventh largest Italian wine company by sales, with annual revenues of €204 million, with Enoitalia close behind at €201 million.

Now that the two companies have joined forces, this puts IWB in second place behind the cooperative group Riunite & Civ, which has an annual turnover of around 600 million euros.

It puts the company in first position among private Italian wine companies, overtaking Marchesi Antinori, which has an annual turnover of 221 million euros.

Enoitalia’s equity value was €150.5 million and as part of the agreement, the seller, represented by the Pizzolo family, will reinvest in IWB by subscribing €1.4 million of shares.

News of the merger sent IWB’s share price up 15% on the Milan Stock Exchange on June 18, the day after the sale agreement.

Before the IWB-Enoitalia agreement, the market had seen the double entry of the private equity fund Clessidra, first with the acquisition of Botter and then with that of Mondo del Vino, creating a group with revenues of €350 million.

At the beginning of the year, Antinori reinforced its leadership in fine wines, acquiring Jermann and entering in style the Collio appellation, famous for its great whites.

Still on the trail, the Prosit holding company, owned by the Made in Italy Fund investor, recently acquired the American importer Votto Vines, which specializes in the distribution of Italian brands in the United States.

One of the main limitations of the Italian wine system has always been the small size of its companies – only 21 companies manage to exceed 100 million euros in turnover, and most of them are cooperatives, owned by winegrowers, or commercial companies focused on consumer wines.

This fragmentation has exposed the Italians to tough competition in international markets, where they come up against much stronger and more structured players like Constellation Brands, which owns the Ruffino brand in Italy, and exceeds $8.6 billion in income.

During the pandemic, the wine industry has defended itself better than other Italian sectors, managing in some cases to achieve considerable growth. As a result, its appeal to investors has grown and attention has shifted to groups that appear capable of developing high penetration in foreign markets.

This is the case of Clessidra with the acquisition of Botter, which in the period 2016-20 was the first company in terms of growth rate.

CEO Marco Ottaviano was clear on the company’s investment objective: “Botter’s growth will be aided not only by the natural ability to expand into overseas markets, but also by the fact that the company is a perfect platform for a strategy of targeted acquisitions with the aim of promoting the creation of an Italian leader in the sector,” he said.

Less than two months later, the confirmation of this desire arrived, with the entry into the Mondo del Vino group, which has wineries in Piedmont, Sicily and Emilia-Romagna.

The case of IWB is different. The group emerged victorious from the pandemic, thanks to an economic model oriented towards door-to-door sales and perfectly adaptable to the conditions of the Covid era.

Its 2020 turnover is up by +30%, allowing Chairman and CEO Alessandro Mutinelli to look into possible acquisitions.

In the end, the choice fell on Enoitalia, based in Verona and with a wide range of products ranging from still wines to Prosecco.

Mutinelli underlined how the merger brings within IWB “a wider portfolio of products and brands, an enlargement of the customer base, greater territorial diversification of sales, entry into the horeca channel, a doubling of volumes with production and commercial synergies: in short, more competitive strength.

In the future, the producers of fine Italian wines, from Santa Margherita and Illy to Bertani and Frescobaldi will not hide their ambitions to acquire properties in the most prestigious appellations of the country (in particular Barolo) or to diversify their offer with great white wines.

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Jean H. Vannatta