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Winery Investment Opportunity in Sabrosa, Portugal

Viticulture company seeks investment for expansion and diversification into wine production, agriculture, and tourism.
This Business is on a Premium Plan
Established 5-10 year(s)
Employees 2 - 5
Legal Entity Limited Liability Company (LLC)
Reported Sales USD 50 thousand
Run Rate Sales USD 50 thousand
EBITDA Margin 20 - 30 %
Industries Wineries + 1 more
Locations  Sabrosa
Local Time 2:17 AM Europe / Lisbon
Listed By Management Member
Status Active
Overall Rating
Seeking Investment
USD 2.8 million for 30.0% stake (Native Currency: EUR 2,900,000)
Reason: - Main objective of the investment is providing scale and diversifying the business, so it can be mo... View More
Includes physical assets worth USD 34 thousand
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Business Overview

- Company presently operates in the viticulture segment and cultivates grapes and sells it to a major Portuguese wine exporter (Sogrape).

- We also provide consultancy services in the area of agriculture, engineering, and taxes, though it is residual.

- Have 2 permanent employees and 10 sub-contractors for the cultivation of grapes and have a yearly production capacity of 40,000 kg to 45,000 Kg.

- Olive oil is done usually every year, but without a commercial end, yet.

- The vines explored by the company are all in the Douro Valley Region, in high-quality zones.

- Currently, the revenue is only generated through the export of grapes and consultancy services.

- We plan to expand and diversify into the wine production, agriculture, and tourism industry. Towards this expansion, the company has managed to obtain multiple lands and is in the process of leasing additional Quintas for agricultural and tourism purposes (detailed information provided in the facilities description).

- Company seeks an investment of EUR 2.9 million, which will be utilized to purchase lands to make a plantation of pistachios and almonds, vineyards, setup a winery to process up to 30,000 kg of grapes, and purchase or lease buildings and renovate them for tourism purposes: 4 to 6 units (school); 2 units (rustic house).

- Post expansion, we will have multiple sources of revenue through the export of almonds and pistachios, production and distribution of our own brand of wine locally and internationally, and hotel & tour bookings.

Background:

- Company is based on traditional values, pursuing a long-time business from family, and is currently only dedicated to viticulture. The family of one of the promoters has been a winemaker and grape growers for more than 200 years.

- As it is a traditional business, long-term relationships between seller and buyer, as with other viticulturists, are natural and prove to be an advantage when compared with the difficulties experienced by newcomers.

- One of the promoters is an engineer with a post-graduation in finance and taxes and in viticulture and oenology and several other short agriculture courses, in the area of almonds and pistachios. The other promoter has strong family ties to the region, is a post-graduate in finance and taxes, and has several short courses in agriculture. The promoters are married.

- Promoter: Engineering in the last 15 years; consultant in Angola; stakeholder and member of the board in Portugal and Mozambique; projects in Portugal, Cabo Verde, São Tomé e Principe, Angola and Mozambique; particularly, financial institutions, public institutions, and central banks; Several projects and worksite control of several million euros projects – from as low as EUR 170 thousand to as high as EUR 100 million; more than 10 years of experience in viticulture.

- Promoter – lawyer, particularly working in labor law and taxes, 15 years; stakeholder of two companies in Portugal; large experience in management;

Products & Services Overview

Current products:

- Grapes – 40,000 kg to 45,000 kg (value actualized with this year harvest). Have major Portuguese multinational as the buyer for the produce.

- Our growth plan after the investment (all unit figures are yearly capacity):

1. Grapes - 75,000 kg to 85,000 Kg.

2. Almonds (cruise year) - 40,000 kg to 60,000 kg (first plantation of 14 ha);

Pistachios (cruise year) - 20 ha, 30,000 kg to 60,000 kg;

3. Wine - 20,000 liters to 35.000 liters.

4. Tourism - 4 to 6 units (school); 2 to 4 units (rustic house)

- There is a large deficit in the market of pistachios and due to drought in the US (California), there are large breaks in the production of pistachios and almonds. Dried fruits are perceive as an healthy food with great grow potential of consumption;

- Great tourism potential, beautiful and peaceful scenarios, filled with vineyards and nature.

Assets Overview

All the assets are (or will be) leased except for agriculture tools (prune scissors, chainsaws, trimmers, etc. ) and an Isuzu pickup (2016) (fair value is EUR 35,000). The estimated lease gain is EUR 61,089 per year. There are also the rights to the EU subsidies that are proportional to the land explored and the contract with Sogrape. Also, there is an approved EU fund.

Buildings and Land:

• Quinta (da Ponte) da Ribeira – 4.4 hectares of vineyards, 7.5 hectares of land with cork oaks, and a 200 square meter house (only walls) (9.5 to 10 hectares, total) (owned by us)

• Several terrains in Celeirós do Douro (Sabrosa) – accounting for 2.2 hectares of vineyards and more than 50 olive trees (owned by us)

• Several terrains in Sanfins do Douro (Alijó) – accounting for 1.5 hectares of vineyards and more than 50 olive trees (family-owned)

• Quinta Sabrosa – 5.5 hectares of vineyards, warehouse, wine lagar, and olive oil lagar, olive trees, plus some more dispersed area of 6 hectares (11 to 12 hectares, total) (owned by us)

• Terrain next to Quinta – accounting for 6.6 hectares of vineyards and 4 hectares of land (11 to 12 hectares, total) (final stage of negotiation, future ownership by us)

• Rustic old village house – 200 square meter, two-floor house (100 square meters per floor) (owned by us)

• Elementary school – 250 to 300 square meters, two-floor, with patio (city hall/public building leased for 30 years.

All the financial needs are covered by us and the capital of investment is not needed for any of the investments referred to at this point.

Facilities Overview

1. The company until the present year explored 10 hectares of vineyards and about 20 hectares of land. Almost all of the land is owned by us (about 8,5 hectares of vineyards and 20 hectares of land), the rest (1.5 hectares of vineyards) is family-owned.

2. Recently, at the end of last year, the company managed to obtain the right to explore, for 30 years, for tourism purposes, the elementary school of Celeirós does Douro (250 to 300 square meter). The contract has been signed with the city hall President and we have already paid a deposit and the concession is in public knowledge. We already have the architecture layout and are going to license it.

3. In addition, there is a 200 square meter house, also in Celeirós do the Douro, owned by our family, that will be leased to the company, that could be used for tourism.

4. We have acquired a “Quinta” with more than 5 hectares of vineyards, 7 hectares of land, and several buildings. Of which, a blazoned old manor house that has a built-up area of 1,500-1,800 square meters with a roofed area of 895 square meters, 3 floors with 1 attic. The entire property needs to be refurbished (rehabilitated) before it can be used. The buildings are ruined or partially ruined, but the stone wall structure is in good condition and other valuable details can (and should be) reused. There is an external area (unroofed) of 732 square meters surrounding the building. In the “Quinta” there is also a 500 square meters old and beautiful warehouse, a Wine lagar and olive oil later.

5. There is also advanced negotiation to buy more than 6.6 hectares of vineyards and 5 to 6 hectares of land that are next to the Quinta that we have bought. Though the negotiation is advanced and we have a preference right over the lands and the deal is not closed at the moment.

Most of the assets at the present moment are owned by us or the family, and the lease of the assets:

• Quinta (Ponte da Ribeira) – house and vineyards– EUR 41.6/month.

• Quinta (Sabrosa) – 2300 square meter built-up area – it will be EUR 30/month.

• Quinta (Sabrosa) – Vineyards – it will be EUR 11.6/month (deed already done, the lease is only symbolic)

• Land (cork oak, olive trees, pines, and bushes – 17 to 20 hectares) – 0 euros.

• Vineyards Celeiros do Douro – EUR 5.55/month.

• Vineyards Sanfins do Douro – EUR 5.55/month.

• Rustic Old Village House – 200 square meters – EUR 60/month.

• Vineyard (Sabrosa next to the Quinta) – it will be EUR 11.6/month (acquisition under final negotiation, still not closed)

• Elementary public school (city hall ownership) – EUR 129.15/month.

All the assets described above are or will be leased to the company, the vineyards are leased for free or at a symbolic price and the buildings (school) are leased for EUR 105/month + VAT. The estimated fair value of all the leases would be more than EUR 5.090/month, which gives an estimated gain of EUR 61.089/year to the company. The lease has (or will have) a duration of 30 years.

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Disclaimer: SMERGERS is a regulated marketplace for connecting business sell sides with investors, buyers, lenders and advisors. Neither SMERGERS represents nor guarantees that the information mentioned above is complete or correct.
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