Foley Family Wines buys Mt Difficulty for $55m

Mt Difficulty, formed in 2004, has about 40ha of plantings in six vineyards. Photo / File

Award-winning Mt Difficulty Wines in Central Otago has been conditionally sold for about $55 million, with listed company Foley Family Wines scheduled to take over by June next year.

Foley Family Wines chief executive Mark Turnbull said the purchase was of all Mt Difficulty's assets and business, including wine brands Roaring Meg and Mt Difficulty, property interests, winemaking and cellar door facilities.

Purchase completion was conditional on gaining agreement from the shareholders of both Mt Difficulty and Foley Family Wines, Overseas Investment Office approval and obtaining ''key third party consents'', Mr Turnbull said.

The shares of Blenheim-based Foley, owned by US businessman Bill Foley, were trading around $1.30 when the company first announced the possible deal in late October, and were yesterday trading up slightly, at $1.50.

Mt Difficulty, formed in 2004, has about 40ha of plantings in six vineyards - Templars Hill, Pipeclay Terrace, Menzies Terrace, Mansons Farm, Target Gully and Long Gully - in the shadow of its namesake.

For its full year ended June, Foley's had total assets of $128.4 million and $10 million debt.

It sold 389,000 cases of wine, with 38%, or 147,000 cases, sold to the US or Canada. Revenue was up 8.6% to $37.8 million for the period.

Mr Turnbull said to fund the Mt Difficulty purchase, Foley had received ''positive'' indications from its bankers and would progress that alongside any other, unspecified, capital-raising options identified by the board.

The Roaring Meg brand had, since 2007, been the main source of growth for Mt Difficulty Wines, while Foley's other brands include Vavasour, Grove Mill and Te Kairanga.