$10m reward for winemaker's long hard slog

David Belcher (from left), Kim Goldwater and Vavasour managing director Peter Scutts seal the transaction that has created one of the country's biggest New Zealand-owned wineries. Picture / Greg Bowker

After more than 30 years of wine-making on Waiheke Island, Kim Goldwater was in celebratory mode in Auckland yesterday.

"It's nice to have a pay-off after a long, hard slog," Goldwater, 70, said after he sold his vineyard for more than $10 million to the New Zealand Wine Fund, a private equity-style investment vehicle.

The deal, which merges the Goldwater and Vavasour wine companies, will take effect next month.

The Goldwaters receive a third of the payment in cash and the rest will be reinvested in new shares in the fund, which owns Vavasour, at $1.35 a share.

This will give the Goldwaters about 20 per cent of the fund, whose wealthy shareholders include National Business Review publisher Barry Colman and former TVNZ chief executive Brent Harman.

The two companies believe the merger will boost opportunities to sell Marlborough sauvignon blanc, said to be in huge demand globally.

The Goldwater operation, originally established on Waiheke, now has 90 per cent of its production in Marlborough. Vavasour pioneered winegrowing in Marlborough's Awatere Valley.

The companies export about 70 per cent of their combined production but believe an 80 per cent export ratio is a realistic goal.

Kim Goldwater, who will join the fund's board, said he would no longer be involved in the day-to-day operation of his business.

"It [the sale] sure does allow a different lifestyle," he said.

The merged operation is expected to achieve sales of more than 220,000 cases a year within 2 1/2 years, making it one of the largest New Zealand wine sellers.

Of six companies that sell more than 220,000 cases, only Delegat's and Villa Maria are New Zealand-owned.

Fund executive chairman David Belcher predicted continued rationalisation of the wine industry.

He said an IPO, trade sale or another merger was possible in the next five years, but the business could also continue as it was.

The fund was earning "millions" in annual net profit now and paying good dividends, but he declined to be more specific about profits.

GLOBAL PLAYER

* New Zealand Wine Fund is to pay more than $10 million in cash and shares for the Goldwater wine business.

* The fund was created to build a large New Zealand-owned wine company capable of taking advantage of the global export opportunities for Marlborough sauvignon blanc.

* Fund shareholders are about 20 wealthy individuals, including National Business Review publisher Barry Colman and former TVNZ chief executive Brent Harman. $10m reward for long, hard slog