The Country Vintner (TCV)

The Story

The Country Vintner (“TCV”) is the second largest distributor of fine wines in the United States and the market leader in the Mid-Atlantic franchise states. TCV’s business model focuses on providing on-premise retailers (“white tablecloth” restaurants), off-premise retailers, and major retailers with a diverse mix of more than 500 wine labels from around the world.

Transaction Dynamics 

A partnership with management to acquire the company from a family owner.  Price was pre-negotiated between the CEO and the original founder.

Investment Thesis

  • Market leader in the Mid‐Atlantic franchise states
  • Attractive platform for acquisitions
  • Positive industry fundamentals, including growing wine consumption
  • Product portfolio and consultative sales force provide sustainable competitive advantage
  • Diverse customer base across multiple channels
  • Regulatory environment creates strong barriers to entry

Incline Value Enhancement

  • Completed three highly accretive acquisitions: the East Coast assets of Henry Wine, Stacole Fine Wines, and Carolina Wine Source
  • Focused management team on optimizing delivery and warehouse operations and reducing working capital requirements by 25%+
  • Eliminated unprofitable business segments
  • Improved gross margins by standardizing pricing practices and implementing sales force incentives
  • Improved EBITDA margin from 4.2% to 6.7%
  • Reduced delivery fleet by 12 trucks while improving throughput by 20%+

Headquarters

Ashland, VA

Industry

Value-added Distribution

Investment Date

August 2008

Status

Realized

Fund

II

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