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February 2016 WINES&VINES 41 VIEWPOINT and the Diageo wine business by Treasury Wine Estates. Valuations of publicly traded wine companies are currently quite strong (as mea- sured by the ratio of total enter- prise value to EBITDA), giving them access to capital and a strong currency for making acquisitions. In general, public companies can be expected to continue their focus on acquiring brands rather than assets, with a selective pref- erence for larger brands that can immediately contribute to sales and earnings. While Diageo has exited the U.S. wine business, Constellation Brands remains an active acquirer and Treasury Wine Estates, through the Diageo acqui- sition, has clearly signaled a com- mitment to growing its brand portfolio rather than entertaining buyout offers. Although Ste. Mi- chelle Wine Estates has not made a major brand acquisition since 2007, it has access to significant capital resources through parent Altria and continues to actively evaluate available acquisition opportunities. Private companies: Major pri- vately owned wine producers are likely to continue to be active ac- quirers in 2016, each with differ- ing acquisition interests depending on their corporate goals and strat- egies. For example, E. & J. Gallo is likely to continue to bolster its presence in the above-$20 per bottle retail price segment with a preference for integrated brands with vineyards. Jackson Family Wines is focused on acquiring brands that can leverage their ex- tensive premium vineyard assets in California and Oregon. Vintage Wine Estates, which acquired the $10 to $20 per bottle B.R. Cohn brand in 2015, can be expected to seek additional brand acquisitions in similar premium price catego- ries as the company builds critical mass in anticipation of a possible IPO. Foreign investors: While some international buyers may be hampered by the strength of the U.S. dollar, the U.S. remains a very atpgroup atpgroup For more inFormation, contact atP at (707) 836-6840 or online at www. americantartaric.com "Wow." "Wow." centrifuges are hard to beat when it comes to simplicity, effciency and performance. And ATP Group is the exclusive entrifuges centrifuges are hard to beat when it comes to simplicity, effciency and performance. And ATP Group is the exclusive are hard to beat when it comes to simplicity, effciency and performance. And ATP Group is the exclusive US distributor in the wine industry for this world leader in separation technology and design. in US distributor in the wine industry for this world leader in separation technology and design. the wine industry for this world leader in separation technology and design. All All we can say is, "Wow." we can say is, "Wow." Distribution in 1995 Distribution in 2015 1,800 Wineries 8,600 Wineries 3,000 Distributors 675 Distributors Source: The Wine Institute, V2 Wine Group and Wines Vines Analytics. PUBLIC WINE-RELATED COMPANIES VALUATION MULTIPLES Enterprise Value/EBITDA 25 20 15 10 5 0 Treasury Brown Forman Constel- lation Diageo Pernod Ricard Altria (Ste. Michelle) S&P 500 (Q1 2015) Willa- mette Valley Vyds Source: Capital IQ, Yahoo Finance, 11/29/15