confidential information memorandum · 2013-05-22 · 1 this information memorandum is based upon...
TRANSCRIPT
Confidential Information Memorandum
Fern Creek Located at Mistletoe Rd.
Dallas, Oregon
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This Information Memorandum is based upon information supplied by MLIC Asset Holdings LLC (“Owner”). This Memorandum is furnished through Maher Advisors, Inc. (“MA”), as the Owner’s exclusive advisor, solely for the use by prospective buyers in considering an acquisition of the Fern Creek vineyard property (“FC” or the “Property”). This Memorandum has been duly approved and delivered by the Owner, the memorandum issuer. This document contains selected information provided by management to assist the recipient in making an initial decision to proceed with further investigation. Maher Advisors and the Owner expressly disclaim any and all liability for representations and warranties, expressed or implied, contained in this document or for omission from it. An acquisition of the Property should be based on further investigation. In connection with a transaction with the Owner, the Owner's sole responsibility with respect to the matters described herein shall be as set forth in the final executed agreement with the Owner containing the terms of such transaction. MA, on Owner’s behalf, reserves the right to negotiate with one or more potential parties at any time and enter into a definitive agreement for a transaction involving the Owner without prior notice to you or other potential investors or purchasers. Requests for additional information If, after reviewing this Memorandum, a prospective purchaser wishes to complete a further review of the Property; such interest should be communicated to MA. Under no circumstances should any contact be made directly with Owner, employees, retailers, or customers regarding the vineyard. All communications and inquires shall be directed to the following: Sean Maher Maher Advisors, Inc. PO Box 1009 1101 Vintage Avenue St. Helena, California 94574 (707) 963.8266 ext. #2 (707) 484.4604 (Cell) [email protected]
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TABLE OF CONTENTS
EXECUTIVE SUMMARY ............................................................................................. 3
Key Investment Considerations ............................................................... 3 FERN CREEK INFORMATION ................................................................................... 4
Summary of Salient Data ......................................................................... 4
Proposed Phase One Planting Blocks .................................................... 5 WILLAMETTE VALLEY ............................................................................................... 6
Terroir ........................................................................................................... 6
Willamette Valley AVA Representative Producers .............................. 7 U.S. WINE INDUSTRY REVIEW 2012 ......................................................................... 8
Oregon Wine Industry Review ................................................................. 9 EXHIBITS ................................................................................................................... 10
Topographic Map ................................................................................... 10
Pre-Plant & Plantable Reserve Map ..................................................... 11
Qualifications of Maher Advisors .......................................................... 12
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EXECUTIVE SUMMARY The acquisition of the Fern Creek Property represents a rare opportunity to own plantable vineyard property in Willamette Valley, one of the most recognized vineyard areas with a world class reputation for Pinot Noir and Chardonnay. The offering consists of approximately 382 acres with approximately 197 acres plantable to wine grapes. This site is one of the former Premier Pacific Vineyard projects. Approximately 59.75 acres have been ripped to 3’, soil amendments applied, trellis system and irrigation system installed. The outlook for the Oregon wine industry is positive. The demographic and cultural trends that favor high quality and distinctive fine wines remain intact. Demand for Pinot Noir, Oregon’s leading grape, continues to grow at a faster rate than most other varieties. Oregon wineries have made significant progress in expanding their market outside the state, through wine tourism, direct‐to‐consumer shipments and sales to distributors in the rest of the U.S. Offering Price: $1,600,000
Key Investment Considerations High‐Profile Neighbors – an impressive list of producers are located within the general area
including Freedom Hill, Croft, Elkhorn, Eola Hills, and Firesteed, Amalie Robert Winery
Oregon Wine Industry – has continued to grow and expand, from 71 wineries in 1990 to
419 wineries in 2011
Real Property – three (3) legal parcels totaling approximately 382 acres with generally
southwest and southeast facing slopes
Pre‐plant Acres – approximately 59.75 net vine acres have been ripped to 3’ and
trellis/irrigation system installed
Plantable Reserve Acres ‐ approximately 197 acres of plantable reserve in addition to the
pre‐plant acres
Water ‐ The State of Oregon has approved the design for a 70 acre foot reservoir and Water Right Permits have been obtained.
Winery Potential ‐ potential to build winery & tasting room with applicable use permits
Estate Potential – two (2) home/estate sites; elevated property with views of the valley and Coast Range mountains, well‐suited for vineyard estate development
Fern Creek Units Unit Type $/Unit TOTAL
Preplant (Net) 59.75 Acre $18,000 $1,075,500
Plantable Reserve 197.00 Acre $6,000 $1,182,000
Ancillary Acres 99.00 Acre $1,000 $99,000
TOTAL $2,356,500
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FERN CREEK INFORMATION
Summary of Salient Data
Property: Fern Creek
Offering Price: $1,600,000
Address: Located at Mistletoe Road, Dallas, Oregon
AVA: Willamette Valley
Owner: MLIC Asset Holdings, LLC
Total Parcels: 5
APNs: 851600 304, 852100 400, 851600 302, 851600 303, 851600 300
Zoning: FF, Farm and Forest in Polk County
Description: Consists of 382 acres with 256 gross acres plantable to vineyards
Topography:Rolling slopes ranging from 400‐750 feet above sea level of mostly
south, southeast and east facing vineyard blocks
Water:The State of Oregon has approved the design for a 70 acre foot
reservoir and Water Right Permits have been obtained.
Vineyard Land: 59.75 Pre‐plant acres with 197 acres of plantable reserve
Building
Improvements:None
Elevation: 400' ‐ 750'
Climate: Region I climate, rainfall averages 40‐44 inches per year
Soils: Jory and Bellpine soil types
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Proposed Phase One Planting Blocks (vines currently not planted)
Block Variety Clone Rootstock Vines Acres
Vines
Per
Acre
Vine
Spacing
(meters)
Row
Spacing
(meters)
1 PN 114 101‐14 9,867 3.90 2,530 1.00 1.61
2A PN 667 RG 6,300 2.49 2,530 1.00 1.61
2B PN 667 RG 7,008 2.77 2,530 1.00 1.61
3 PN 777 RG 9,133 3.61 2,530 1.00 1.61
4 PN 828 16‐16 11,663 4.61 2,530 1.00 1.61
5 CH 76 RG 11,157 4.41 2,530 1.00 1.61
6 PN 777 RG 4,326 1.71 2,530 1.00 1.61
7 PN 4 101‐14 10,955 4.33 2,530 1.00 1.61
8 PN 777 RG 4,149 1.64 2,530 1.00 1.61
9 PN 667 101‐14 7,413 2.93 2,530 1.00 1.61
10 PN 777 RG 2,277 0.90 2,530 1.00 1.61
11a PN 777 RG 6,199 2.45 2,530 1.00 1.81
11b PN 777 RG 3,112 1.23 2,530 1.00 1.81
12a PN 777 RG 8,526 3.37 2,530 1.00 1.81
12b PN 777 RG 8,223 3.25 2,530 1.00 1.81
13 PN 777 101‐14 12,321 4.87 2,530 1.00 1.61
14a PN 667 101‐14 14,067 5.56 2,530 1.00 1.61
14b PN 667 101‐14 4,124 1.63 2,530 1.00 1.61
15 PN 115 101‐14 10,348 4.09 2,530 1.00 1.61
151,168 59.75
Fern Creek
TOTAL
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WILLAMETTE VALLEY The Willamette Valley has emerged as a hotbed for high‐end wine producers during the last 20 years. Wine grape growing in Oregon began in the Willamette Valley in 1966 with a few hardy Pinot Noir pioneers and has grown to over 10,000 planted acres today. The area is known for its ability to produce distinctive high‐end Pinot Noir, Chardonnay and other aromatic white wines. The AVA consists of 5,372 square miles stretching from the Columbia River in the north to Eugene in the south and from the Coast Range in the west to the Cascade Mountains in the east. The boundaries of the Willamette Valley AVA were established in 1984, and since then six new, smaller AVAs have been created within the Willamette Valley AVA. General attributes that make the Willamette Valley suitable for cool climate grape growing include the protection afforded by the Cascade Mountains to the East, Coast Range mountains to the West and a series of lower hill chains to the extreme north of the valley. Almost all grape growing is done on lower hillsides, avoiding deeply fertile alluvial soils and cooler hilltop mesoclimates.
Terroir
It is often said that Pinot noir wine, perhaps more so than any other varietal, is "all about place". The Fren ch call it "terroir", loosely translated "sense of place". In the world of wine it specifically denotes the idea that the land where the grapes are grown imparts unique characteristics to the wine. Terroir is the central concept for the French Appellation d'origine contrôlée (AOC). Appellation designations for wines around the world generally follow this model, although the specifics can vary widely from country to country. In the U.S., the rough equivalent to the AOC is the AVA or American Viticultural Area. The components of terroir include climate, soil type and topography. The Willamette Valley has proven its terroir is exceptional for Pinot Noir.
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Willamette Valley AVA Representative Producers
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U.S. WINE INDUSTRY REVIEW 2012 (source: Gomberg Report, Year-End 2012) Following an explosive industry growth year in 2011, the pace of wine shipments slowed in 2012, partially as a result of wine supply shortages. Total wine shipments from all sources, including California, and other states, climbed to a record 360 million cases. In an extraordinary development, 2012 wine demand exceeded the available California wine supply, so that global shipments of California wine declined by approximately 6.3 million cases, or 4%. The U.S. base of wine consumers broadened in 2012. Generally favorable demographics, more points of distribution, technology enabled routes to market, pervasive media visibility and an influx of new brands were among the key drivers of growth. At this new volume level, the United States is now the largest wine consuming nation in the world, but still ranks low among nations based on per capita consumption. Per Capita Consumption:
Comparative Wine Shipments to the U.S. Market 2007‐2012:
Rank Country Amount
1 France 49 litres
2 Portugal 43 litres
3 Italy 42 litres
4 Switzerland 38 litres
5 Denmark 32 litres
6 Austria 30 litres
7 Spain 28 litres
8 Greece 26 litres
9 Belgium 25 litres
10 Argentina 24 litres
18 United States 9 litres
Actual
2008
%
Change
Actual
2009
%
Change
Actual
2010
%
Change
Actual
2011
%
Change
Estimated
2012
%
Change
Table
Wine273 1% 280 2% 286 2% 304 5% 315 3%
Dessert
Wine 28 4% 27 ‐2% 28 8% 30 4% 28 ‐8%
Sparkling
Wine13 ‐2% 14 3% 15 11% 17 13% 18 2%
Total
Wine314 1% 321 2% 330 3% 352 5% 360 2%
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Oregon Wine Industry Review Oregon’s wine industry is expecting sales growth of between 7%‐11% in 2012, according to
research commissioned by the Oregon Wine Board. Driven by Pinot Noir, which is expanding at
around 10% annually, as well as Pinot Gris, Chardonnay and Riesling, sales of Oregon wine have
risen by 12% annually over the past five years, hitting $252 million in 2011. Just over one‐third
of Oregon wine shipments stay in the Pacific Northwest region, while direct‐to‐consumer sales
account for roughly 20% of the state’s wine business.
The growth in the Oregon wine industry that began in the late 1990s has continued at a rate
that has outpaced that of the economy. From 2000 to 2010, the wine grape acreage increased
93%, the number of Oregon wineries crushing grapes increased by 58% and case sales of wine
nearly doubled. Since the last economic impact report, winery revenues increased 60% and the
net economic impact on the state by $564 million.
Oregon winegrowers continued to focus on the higher priced, higher quality segment of the
wine market, although several brands have started to successfully penetrate the upper mid‐
range of the market as well. Of the major producing states, Oregon growers continue to achieve
the highest average price per ton. Oregon wineries realize the highest average revenues per
case.
The outlook for the Oregon wine industry is positive. The demographic and cultural trends that
favor high quality and distinctive fine wines remain intact. Demand for Pinot noir, Oregon’s
leading grape, continues to grow at a faster rate than most other varieties. Oregon wineries
have made significant progress in expanding their market outside the state, through wine
tourism, direct‐to‐consumer shipments and sales to distributors in the rest of the U.S.
Oregon's Wine Industry
In Millions 2005 2010
Percentage
Increase
Wine grape grower revenues $16.0 $30.5 91%
Distribution revenue $223.7 $449.3 101%
Wine tourism revenues $92.2 $158.5 72%
Direct employment 5,583 7,634 37%
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EXHIBITS
Topographic Map
Pre-Plant & Plantable Reserve Map
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Qualifications of Maher Advisors
Sean Maher started Maher Advisors after an eight‐year career as a broker at Cushman &
Wakefield; a New York based Rockefeller Group Company. At Cushman & Wakefield Sean
specialized in commercial leasing and investment sales. Since 1995, Sean and his firm has
focused on mergers and acquisitions, equity investments, management consulting and
strategic sales and marketing within the wine industry. Sean has successfully completed
merger & acquisition assignments for clients such as; Beringer, CalPERS, Taittinger family,
St. Supery, Bill Hambrecht, and Bill Harlan. Sean received his undergraduate degree from
UCLA and has a MBA from St. Mary’s College of Moraga. Sean was licensed as a real estate
broker in 1987. Sean is a member of the National Association of Certified Valuation Analysts
(NACVA).
Maher Advisors’ Services Include:
Winery & vineyard mergers & acquisitions Winery & vineyard valuations Fairness opinions Exit strategies General management consulting Strategic planning
Exclusive Advisor: Sean Maher
Maher Advisors, Inc.
1101 Vintage Avenue
St. Helena, CA 94574
C: (707) 484.4604
www.maherwine.com
Selected Wine Industry Transactions completed by Maher Advisors: