Australia's biggest family owned winemaker has found a partner, a Canadian one.
A long-term partnership has been signed between Southern Premium Vineyards and the Casella family.
SPV, is owned by Canadian pension fund PSP Investments, which will buy a number of vineyards in South Australia and NSW from Casella.
The deal has already been approved by the Foreign Investment Review Board.
SPV already owns 460 hectares of vineyards in the Coonawarra and Barossa Valley regions.
SPV's arrangement with Casella covers vineyards totalling 7215 hectares across 35 properties.
SPV has also entered into a long-term grape supply agreement with Casella.
Under the terms of the deal with Casella, SPV will take on management of the vineyards and associated employees.
Casella announced in July it was selling its vineyards and other land on 35 properties across an enormous 7258 hectares (17,935 acres) in South Australia and NSW's Riverina.
Casella's brands include the popular Yellow Tail.
The proposed sale includes a selection of their landmark vineyards in Barossa Valley, Clare Valley, Langhorne and Currency Creek, Limestone Coast, and the Riverina.
Casella is offering a long-term sale agreement so it keeps the wine grapes from these vineyards to ensure ongoing supply for its already established brands.
Some Casella-owned vineyards located in the Riverina and Barossa are not included.
The vineyards were offered in one line through Colliers.
The company says it will continue to source from growers across NSW and South Australia.
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"The intended sale will not impact these longstanding relationships or contractual agreements in place," the company said.
Casella managing director John Casella said the decision to offer the properties followed a review of its operations.
Mr Casella said the family's decision aligns with a strategic objective to focus resources on setting the business up for long-term success.
"In line with this, proceeds from a successful sale will be reinvested to support the growth of the company's wineries and wine brands in the domestic and international markets."
He said the company was in "a sound financial position" after having recently experienced global record sales for (Yellow Tail) during the COVID-19 pandemic.
"While demand has stabilised, we are forecasting future growth due to ongoing investment in our brands supported by a strategic innovation pipeline," Mr Casella said.
"The intended strategic partnership will allow us to focus on strengthening our brands globally, and therefore deliver positive outcomes for the Australian wine industry."
Casella Family Brands is still based in Yenda NSW (near Griffith) where Italian migrants Filippo and Maria Casella first settled and made wine in 1969.
The family's winery at Yenda is today the largest wine production facility in Australia.
The company also sells Casella Family Wines, Peter Lehmann Wines, Brand's Laira, Morris of Rutherglen, Baileys of Glenrowan, and Atmata.
The PSP Investment offshoot, Southern Premium Vineyards, said the partnership with Casella includes water entitlements, plant and equipment.
SPV will take on the management of the vineyards and associated employees.
Mr Casella said: "We are pleased to be entering this partnership with SPV, a platform of PSP Investments, which is an investor with a proven track record of successful long-term investment in agribusiness in Australia and around the world.
"We are confident that SPV will continue to deliver the quality and consistency of the grapes we require, safeguard and preserve the vineyards and ensure the wellbeing of employees."
SPV director Nick Gill said: "SPV's strategy is to offer wine companies a multi-regional grape supply solution for their wine grape sourcing as an alternative to owning or leasing vineyards - and a partnership with Casella is a perfect fit with this strategy."
Marc Drouin, senior managing director, real assets and head of natural resources investments, PSP Investments, said: "Our commitment to sustainable farming combined with our long term investment horizon allows PSP Investments to lever Australia's unique global competitive position for its quality wine grapes.
"Casella is a best-in-class group with an impressive portfolio of vineyards in some of the country's most highly regarded wine regions.
"This acquisition is a cornerstone investment for both SPV and PSP Investments' global wine portfolio."
Casella has plans to grow its wine business in Australia and internationally.
Proceeds from the sale and partnership agreement, which was not disclosed, will be reinvested into the Casella business.
PSP Investments has a portfolio of long-term Australian agricultural investments and partnerships, including in irrigated farming, broadacre crops, beef and dairy cattle, wine grapes, tree nuts, fruits and vegetables.
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