Akke 1
MEMORANDUM
From: Ronald Akke
To: Mr. Triggs
RE: Vincor’s recent performance, future direction and potential Goundrey acquisition
As requested, the following is an analysis of Vincor’s performance in the past, the
direction in which it is headed and suggestions to help move the business strongly into
the future with specific emphasis on the potential acquisition of Goundrey.
Vincor has performed well recently. We find ourselves in a weak to moderately
competitive industry (please see Exhibit 1), we are on top of the driving forces for
change in our industry (Exhibit 2) and our goals are aligned with key industry success
factors (Exhibits 3 and 6). We face ample opportunity and only minor threats (Exhibit 4)
and stand ready to capitalize on these opportunities and threats by utilizing our internal
strengths and building upon our weaknesses (Exhibits 8 and 9). We are in good
standing financially (Exhibit 5) and enjoy much internal strength (Exhibit 7). Our
corporate strategy stands ready to respond to national drivers and we happily exceed
the industry average in pushing for global leadership (Exhibits 10 and 11). We are
confidently moving towards our business objectives (Exhibit 12) and the acquisition of
Goundrey will be a great step towards these goals (Exhibit 13).
As exhibit 1 shows, there is rather weak rivalry within our industry. The only real
threat we face within our industry comes from buyer bargaining power. We must make it
our chief concern to satisfy the buyer above all other. This is because we face fairly
weak intra-industry competition, only a weak threat from new entrants and our suppliers
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have weak bargaining power. We face a moderate threat from substitute products, but
this again mostly comes from the ease by which our customers can change their buying
habits. We must ensure we effectively respond to changes in customer preferences.
Although we face relatively weak within-industry competitive pressures, we still face
threats that must be neutralized. The best way to do this is to utilize our strengths and
ameliorate our weaknesses. Figure 9 represents several ways that we can do this. For
instance, we can utilize our strong Canadian distribution system to create export
capabilities that will allow us to expand to strong New World markets such as the United
Kingdom. Further, we can use our current foothold in Asian markets to expand further
into these developing economies. We should continue to diversify our geographical
base in order to spread our economic, social and climatology risks. We can also utilize
our American vendors to gleam greater information regarding consumer tastes.
Because the overall competitiveness of our industry is weak, we must continue to
push for higher operating and profit margins. As exhibit 5 shows, our gross profit margin
has been very strong. Similar can be said of our capital structure with particular
emphasis upon our company’s ability to convert our 2001 debt into 2002’s equity. But
we must look to continue to increase our net profit margin. The stagnant nature of this
ratio over the last five years is unacceptable in an industry as weakly competitive as our
own. We must ensure that last year’s increase in net profit margin continues into the
future. The best way to do this is by controlling our costs while increasing revenues by
more effectively managing our inventory levels. We must better manage the excess
inventories we gained from our acquisitions of R.H. Phillips and Hogue Cellars if we
wish to increase our profitability.
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Exhibit 3 shows that our industry is facing change. Our strategic decision in 1995 to
focus upon premium wines has been one of the smartest moves we’ve made. This is
because premium wines represent the fastest growing segment of the wine industry.
We are well positioned in the ever-expanding New World markets, and an opportunity
lies ahead of us to gain global market share in our fragmented industry.
We have so far responded well to industry changes on both a global and national
level. As Exhibits 10, 11 and 12 show, we have responded strongly to every national
driving force and we are above the industry average in responding to global change.
Central to this success is our “think global, act local” approach. Vincor sets widereaching growth goals yet also allows our United States and Canadian management
teams to respond in the best way they see fit. Exhibit 7 shows this to be a key strength
for our company, but we must be careful to remain efficient while employing this
approach.
As we move into the future, we must actively and aggressively pursue our
objectives. Exhibit 3 shows the key success factors upon which we must focus. We
must continue to maintain our strong reputation for providing high quality wines at
reasonable prices by focusing on vertically integrating our distribution channels and
expanding into untapped New World giants such as Australia and the United Kingdom.
To do so, it is my opinion that we should move forward with our acquisition of
Goundrey. It can be seen in Exhibit 6 that although we stand competitively strong, we
could be strengthened further by this acquisition. Consider Exhibit 13. It can be seen
that the acquisition of Goundrey would give Vincor a strong presence in the
strengthening Australian premium wine industry. Even more importantly, Vincor’s
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presence in Australia could be a stepping stone towards creating a very strong export
market. Australia is currently the largest exporter to the very important United Kingdom
market (ranked 7th in world wine consumption and rising). Although Goundrey does not
yet export many of its products, establishing a location in Australia could lead to
business alliances. In exchange for information about the Canadian and American
markets, Goundrey’s business contacts could provide us information about exportation
to the United Kingdom, Japan and other important Asian markets. This type of
partnership would help Vincor gain greater global market share (in Australia and
beyond), increase the number of key New World markets it serves and it would stand a
strong chance at increasing ice wine sales through Asian exportation. In short, by
acquiring Goundrey, Vincor can move confidently in the direction of its objectives. Most
importantly, based on 2000 EBITDA, Exhibit 13 shows that valuing Goundrey at
AUD$62.5 million is a fair price based on the earnings multiple. Vincor should acquire
Goundrey.
Thank you very much for considering this analysis.
Best regards,
Ronald Akke
Akke 5
EXHIBIT 1: 5 Forces of Industry Competition:
Industry Rivalry: Weak-Moderate Strength
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The global wine industry is very fragmented with the top 25 wine producers controlling
only 7% of the global market; the world’s top producer only controls 1% of global market
share. This fragmented market is due in large part to consumer preferences for distinct
vineyard tastes as well as difficulties with supply chain and sales force integration. This
has led to less competitive pressures than would be apparent in an industry dominated
by a major player such as Wal-Mart.
Buyer demand varies both by the country and by the segment in which the wine sells.
Vincor is currently the 4th largest player in North American markets which are growing at
an overall pace of 3%, but Canadian ultrapremium and specialty wines are growing at
30-45% and US superpremium wines are growing at 8%. These are both market
segments that Vincor relies upon for the bulk of its revenue (72% in 2002), so
competitive pressures may grow in these fast moving markets.
Buyer demand has not fallen off and thus there is no evidence of excess inventories and
thus Vincor faces little competitive pressure from this area.
There has been a proliferation of Canadian wine producers in recent years, with the
number of vineyards growing at an annual rate of 30-100% throughout the 1990’s.
However, Vincor is the largest Canadian wine producer so it holds an advantage over
these startups both in its larger size and enjoying better capabilities such as economies
of scale.
Is it easy for buyers to switch brands, which can lead to competitive pressures, but these
pressures are only moderate because the industry is very differentiated.
Price cutting is not a worry in this industry because higher quality wines require a feeling
of selectivity.
There is some consolidation occurring in the industry which could lead to competitive
pressures on smaller producers, but because Vincor is ranked 22nd in the world it should
be able to keep in lock-step with this M&A activity.
Threat of New Entrants: Weak Strength
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It is possible for companies to achieve economies of scale in this industry by way of
bottling, distribution and sales force capabilities, but the opportunity for these economies
of scale is only moderate in comparison to more commodity-based industries. This leads
to weak-moderate competitive pressures.
There is strong brand preference and customer loyalty in the premium wine industry,
which leads to a weaker threat of new entrants.
Although it is relatively inexpensive to open a small vineyard, establishing a reputation in
the industry as well as acquiring capital to establish strong manufacturing facilities
represent strong entry barriers.
High tariffs and taxes on domestic and imported alcoholic products also represent a
significant barrier to entry. The US requires a costly three-tier distribution system, while
Canada charges a 42% tax on alcoholic beverages.
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Threat of Substitute Products: Moderate Strength
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High quality wines only truly face substitution threat from champagne (not beer or hard
liquors).
Champagne is readily available to those of legal drinking age, but it is priced similarly to
wines and thus represents only weak-moderate substitution threat.
Some buyers view this substitute as comparable to premium wines, but these products
are often used at different functions (wines on a nightly basis while champagne only for
special occasions). Thus, this represents a weak threat.
The cost to switch products is low and thus represents a strong substitution threat.
Bargaining Power of Suppliers: Weak Strength
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The wine industry is very differentiated. It is not a commodity-like item readily available
from multiple suppliers which leads to weak supplier bargaining power.
There are many suppliers available throughout all major markets for these items and
thus suppliers have weak bargaining power.
Most wine producers exercise complete control over their most important input (grapes).
Bargaining Power of Buyers: Moderate-Strong Strength
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The switching cost for buyers to competing brands or substitutes is low, representing
strong buyer bargaining power.
But there are far too many individual buyers for them to exercise great control over wine
companies.
Demand for the product is moderate in many markets, leading to weak bargaining
power.
Many buyers are connoisseurs and thus very well informed about their purchases,
leading to strong bargaining power.
Finally, buyers make the ultimate decision whether they wish to purchase this luxury
item, and thus they hold fairly strong bargaining power over the wine industry.
Conclusions from 5 Forces Analysis:
As can be seen from the above analysis, the wine industry is fairly attractive and
should represent moderate to strong profit potential. We know that profit margins in the
United States are very high and competitive pressures from most market areas are quite
weak. Although many wine industry segments are stagnating, New World customers are
increasingly seeking premium wines. For these reasons, we can conclude that Vincor
made a very wise strategic move in 1995 to change their focus to the premium wine
segment. Strong growth plus weak competition foretells very positive financial
performance in the years ahead.
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EXHIBIT 2: Driving Forces of Change and Their Effects on Firms in the Industry:
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The industry’s long-term growth rate is rapidly moving towards strong growth in the
premium and higher quality segments, while lower quality wines face stagnation and/or
contraction.
New World wine producers are increasingly becoming more reknown. This began in
1976 with California wines beating French and Italian wines in blind-taste tests and
continues as Western Australian wines grow in popularity and Canadian ice wines find a
strong footing in Asian markets.
Undeveloped Asian markets such as Japan and China represent strong growth potential
areas.
The industry is moving towards global integration as M&A activity increases, but thus far
individuals firms have not developed the ability to develop a business model that allow
them to capture a large portion of market share due to difficulties in finding sales and
distribution synergies.
Government policy is always an important driving force to watch in regards to the alcohol
industry. Although prohibition laws are only found in less-developed countries,
governments often see alcohol as the easiest industry to target and thus impose hefty
“sin taxes” on these products.
EXHIBIT 3: Industry Key Success Factors:
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Winning the UK’s import-driven wine market is key to the success of New World
producers. As an Old World country that produces very little of its own wine, this affluent
nation seeks to import quality wines from throughout the world. This “crucible” nation is
ranked 7th in wine consumption and growing. It is very significant that Australia is the
leading importer to the United Kingdom.
Establishing and maintaining a reputation for high quality, reasonably priced wine will
lead to strong competitive success in developing New World markets.
Establishing strong distribution channels that are as vertically integrated as legally
possible will help wine companies to keep prices down and compete effectively despite
high taxes on their goods.
EXHIBIT 4: Wine Industry Opportunities and Threats:
Opportunities
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Strong global growth, especially towards
premiums.
Fragmented market where the largest
player only controls 1% of market share
implies a strong opportunity to win market
share.
New World markets continue to grow, as
well as developing Asian markets.
US market is very strong due to high profit
margins.
Threats
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Wine industry is an agricultural business
which is always under threat of adverse
weather conditions.
A global economic downturn would
decrease demand for luxury goods such as
wine.
Changing consumer preferences and
tastes can lead to poor revenue growth
because buyers hold strong bargaining
power in this industry.
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EXHIBIT 5: Vincor Financial Analysis:
Gross Profit Margin = (EBITDA)/Revenues
1998: 13.60%
1999: 13.80%
2000: 14.10%
2001: 16.80%
2002: 18.70%
Net Profit Margin = (After-tax Profit)/Revenues
1998: (10.8)/(206.4) = 5.23%
1999: (11.7)/(253.2) = 4.62%
2000: (13.3)/(268.2) = 4.96%
2001: (14.3)/(294.9) = 4.85%
2002: (26.9)/(376.6) = 7.14%
Debt-Equity Ratio = (Short-Term Debt + Long-Term Debt)/(Total Stockholders’ Equity)
1998: (50.9)/(102.3) = 0.50
1999: (92.5)/(115.8) = 0.80
2000: (80.5)/(129.3) = 0.62
2001: (254.5)/(145.3) = 1.75
2002: (110.1)/(396.8) = 0.28
Inventory Turnover = (Turnover)
1998: 1.2
1999: 1.1
2000: 1.2
2001: 0.7
2002: 0.7
Vincor’s Financial Strengths:
 From the four financial ratios above, we see that Vincor has demonstrated a strong
ability to manage its Cost of Goods Sold, as evidenced by its gross profit margin.
The steadily increasing nature of this ratio shows Vincor’s strength in managing
operating efficiencies, especially because the company was able to maintain this
stability while completing two large acquisitions.
 The stagnant nature of Vincor’s net profit margin from 1998 to 2001 is disconcerting,
but the ratio’s jump from 2001 to 2002 shows a favorable sign of improvement. It will
be important to monitor whether Vincor can maintain this increase. If they can,
Vincor will show that it not only manages its cost of goods sold well but also its
interest expenses and depreciation deductions.
 Vincor’s debt-to-equity ratio looks very strong. The ratio stood at reasonable levels
from 1998 through 2000. 2001’s aberration is due to its acquisition, and Vincor’s
ability to quickly decrease its debt while increasing its equity shows management’s
disciplined nature.
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Vincor’s Financial Weaknesses:
 Vincor’s inventory turnover is interesting. Vincor’s two acquisitions caused the
company to hold onto much more inventory that it did prior to these acquisitions.
This could suggest a few things. First, the acquired companies may age their wines
more than Vincor’s previous business units did, leading to less inventory turnover.
However it is more likely that when Vincor expanded into the United States, their
inventory control became less efficient due to lack of experience with R.H. Phillips
and Hogue’s distribution channels. This will be an important ratio to keep an eye on
in the future, especially if Vincor goes ahead in acquiring Goundrey because strong
turnover control is crucial to streamlining business and keeping costs at a minimum.
 After viewing Vincor’s consolidated financials from 1998 to 2002, it can be seen that
Vincor’s return on capital employed has decreased. Although this is to be expected
in the years following large acquisitions, it will be important to see that these
investments increase over time. If they do not, it suggests that Vincor is not using its
capital in the most effective manner to maximize shareholder return.
EXHIBIT 6: Vincor’s Competitive Strength Assessment:
Industry Key Success Factors
Weight
Winning the UK’s wine market1
Good reputation, reasonably priced2
Strong distribution channels3
TOTAL:
0.2
0.5
0.3
Pre-Goundrey
Acquisition
Rating
Wtd
Score
0
0
7
3.5
6
1.8
5.3
Post-Goundrey
Acquisition
Rating
Wtd. Score
3
8
8
0.6
4
2.4
7.0
1) After acquiring Goundrey, Vincor will still not have any exports to the United Kingdom,
but Australia is the top-ranked importer to the UK. By utilizing Australian business
contacts, strategic alliances will be easier to make that can lead to wine imports to the
UK and other Asian countries.
2) Vincor already has a strong reputation in Canada and a growing reputation in the United
States through its recent acquisition. Acquiring Goundrey would increase its reputation in
Australia as well.
3) Vincor has very strong distribution channels in Canada and developing channels in the
United States. An acquisition of Goundrey would give Vincor Goundrey’s firmly
developed Australian channels as well.
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EXHIBIT 7: Vincor’s Value Chain Analysis
Supply Chain Management & Procurement
Vincor receives most all of its grapes from company owned vineyards spread throughout
Canada, the United States and other countries. Vincor recognizes that a diversified base of
grapes is essential to create distinct flavors as well as to protect the company from the
threat of adverse weather conditions. Reducing risk and increasing Vincor wines’ distinct
flavors leads to better cost control and customer satisfaction.
Distribution
Vincor relies upon independent retailers to sell most of its products throughout the world.
For instance, it distributes its wines through 3,300 premium restaurants throughout the
United States. Also, the company owns a 165-store Wine Rack chain of retail stores that
specifically sell Vincor’s best wines. This distribution network helps to decrease middle-man
costs, which in turn increases the company’s profit margins. Further, the company has
production facilities spread throughout Canada which help to decrease costly travel
expenditures and allows Vincor to quickly respond to customer (distributor) demands.
Marketing & Sales
Some of the greatest synergies that Vincor found through its acquisitions of R.H. Phillips
and Hogue Cellars comes from overlaps in the marketing and sales departments. Vincor
has been able to use the 8 brokers and 40 sales person team it gained after acquiring R.H.
Phillips to efficiently sell its own Canadian-based products as well as Hogue Cellars
products throughout the United States. Internationally, Vincor focuses upon duty-free
networks and its international team to inexpensively sell its well-known ice wine brand.
These efficiencies lead to cheaper marketing and sales costs, and thus higher profits for the
firm.
Managerial Oversight and Strategy
Management has two different strategies; one for each major market it is in. In Canada,
Vincor wishes to continue to expand its sales while increasing efficiencies to create a cash
cow. It also wishes to use its already strong distribution network to build export capabilities
to the United States and eventually other international locations. But Vincor’s strategy for
America is different. Vincor wants to use its California and Washington based operations to
increase the company’s product innovation capabilities and expand its focus in the higherend, superpremium wine segment. These conflicting strategies will allow the company’s
managers to focus upon differing customer tastes and desires. However, it may lead to coststructure inefficiencies and lack of a globally unified business.
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EXHIBIT 8: Vincor’s Internal Strengths and Weaknesses
Strengths
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Weaknesses
Gaining distribution and sales team
synergies throughout the United States
through its recent acquisitions.
Wineries owned throughout Canada
that allows the company to respond
efficiently and effectively to changing
customer demands and allows some
protection against adverse weather
conditions.
Canadian management teams have
different goals than American teams,
allowing leaders to respond more
effectively to the needs of their
clientele.
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Lack of unified international strategy
leads to increased managerial
dissonance, which could in turn lead to
function overlap and conflicting goals.
This in turn leads to cost inefficiencies.
The legally binding three-tier
distribution system in the United States
leads to cost inefficiencies.
EXHIBIT 9: Vincor’s TOWS Matrix
Strengths
1. Strong United States distribution and sales
teams.
2. Distribution centers spread throughout
Canada.
3. Strong international acceptance for ice wine
brands.
Opportunities
1. Strong global growth
toward premiums.
2. Fragmented market.
3. New World and Asian
markets continue to
grow.
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Threats
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1. Adverse weather
conditions can kill crops.
2. Global economic
down-turn will decrease
revenues.
3. Changing consumer
preferences.
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Use Vincor’s already strong
Canadian distribution system
to create export capabilities to
gain market share throughout
the New World.
Use Vincor’s already readily
accepted ice wine brand to
further increase growth
throughout Asian markets.
Rely upon its diversified
geographical base of wineries
to protect against adverse
weather conditions.
Build its strong international
acceptance for ice wine brands
to diversify its customer base
to protect against localized
recessions and changing
consumer preferences.
Weaknesses
1. Lack of unified international strategy.
2. Legally binding three-tier US distribution system.
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Create a unified international
strategy that gives specific steps
to increase international market
share. This strategy will include
cost efficiencies and build off of
Vincor’s growing knowledge of
international distribution networks
to gain market share in this
fragmented market.
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A unified international strategy
will cut costs and lead to higher
quality wine at lower prices,
which will receive some
protection from recessions.
Continue to build relationships
with US vendors, which will in
turn give the company better
information about American
consumer preferences.
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Akke 12
EXHIBIT 10: Global Integration – National Responsiveness Grid (Wine Industry)
Forces for Global
Integration
Industry
Forces for National Responsiveness
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Forces for Global Integration
Forces for National Responsiveness
Diversified geographical base to protect
against adverse weather, economic and
customer taste differences.
Fragmented market leaves plenty of
market share ready for the taking.
Potential distribution and sales team
economies of scale.
Diversified geographical base for grapes,
which can lead to distinctly blended flavors.
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Varying differences in consumer
preferences throughout New World
countries.
Differences in economic development
leads to different standards of living and
thus differences in the cost of wine
consumers can afford.
All distribution networks are very localized
without any global retail chains.
Alcoholic products are subject to different
tariffs and government sanctions based
upon an individual country’s value system.
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EXHIBIT 11: Global Integration – National Responsiveness Grid (Vincor)
Vincor
Forces for Global
Integration
Forces for National Responsiveness
Responses to Global Integration
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Has expanded operations into the United
States to tap diversify its winery locations
to include Washington and California.
Has set on a path to success that seeks to
gain market share in both the United States
and throughout Asia.
Has developed distribution and sales team
synergies in the United States with recent
acquisitions.
Now has grapes grown throughout
Canada, the United States and various
other countries.
Responses to National Responsiveness
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Vincor has different strategies for its
different Canadian and United States
based markets that allows management to
effectively respond to differing consumer
tastes.
Focuses on popular superpremium wines
throughout North America while focusing
its Asian operations upon ice wines.
Utilizes different distribution networks in
each country; in Canada has its own retail
chain, in the US it utilizes private retail
chains and in Asia they focus on duty-free
outlets.
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EXHIBIT 12: Evaluation of Global Integration – National Responsiveness Efficacy
Vincor’s mission statement is to become a top-10 wine producer (currently 22nd in the
world by revenue) by producing premium wines for the New World while controlling sales and
distribution channels in all premium wine consuming regions. To reach this international goal,
Vincor seeks to utilize the largest New World markets; the United States, Australia, Canada,
and Japan. To be a market player, Vincor sees that it is necessary to be a major player in five to
six regions.
It appears that Vincor has taken the necessary steps to move towards their stated
purpose. In the last two years they had expanded operations out of only Canada and into the
United States, capturing market share in the two biggest U.S. wine producing regions (California
and Washington state). This expands its distribution and sales teams and has led to greater
revenues, and thus greater sales growth. It was important to expand into the United States
because it is one of the largest premium wine consuming regions in the world. However, this
U.S. expansion conflicts with Vincor’s goal of controlling all distribution channels that it is a part
of, since the U.S. relies upon a three-tier system.
Overall, it looks as if Vincor is doing well to respond to global forces for integration and
forces for national responsiveness. It has diversified its geographical holdings while still allowing
managers to respond to localized consumer preferences. It is focusing its operations on the
premium wine segment, but recognizes that consumer bases in Asia have different preferences
than in Canada and the United States. It has developed its own retail distribution chain in
Canada, but relies upon localized distribution laws in the United States while focusing on costefficacy in Asia. So overall, it appears that Vincor is responding to these driving forces very
admirably.
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EXHIBIT 13: Evaluation of a Potential Goundrey Acquisition
Vincor’s Goals:
1. Become a top-10
global wine producer.
2. Focus upon premium
wine consuming regions.
3. Control sales and
distribution channels in
premium wine consuming
regions.
4. Utilize the largest New
World markets.
5. Be a large international
player in 5-6 regions.
6. Grow ice wine over
200% in 5 years.
7. Double US Sales.
8. Make CDN$350 million
in acquisitions.
9. Increase Canadian
revenues by CDN$100M.
Attractiveness Test
Cost of Entry Test
Goundrey has shown strong sales and
EBITDA growth from 1999 to 2000 but
fell off in 2001 (likely due to
management being preoccupied).
With an overall price of
AUD$64.5 million, Vincor
would be paying an earnings
multiple of about 18 over 2001
EBITDA.
Australia represents a very strong New
World market place for premium wines.
It enjoys 26% in consumption growth
annually.
Goundrey has a strong distribution
network throughout four Australian
states, in each of which Goundrey is
the distributor’s most important client.
85% of Goundrey’s business is in the
$15-$30 superpremium wine market.
Goundrey only exports 3% of its goods,
but Australia is the number one
exporter to the UK, which is a very
important wine import nation.
Goundrey has its own bottling
capabilities that could help spur export
growth.
Western Australia has a good
reputation for super- and ultrapremium
wines.
Goundrey enjoys strong salesforces in
New South Wales and Queensland.
Australia is located closer to Asia,
representing an opportunity to expand
exports into Japan and Chinese
markets, and thus expand on Vincor’s
ice wine industry.
However, due to Goundrey’s
CEO’s age and decreased
interest in the business over
the past year, it is more
important to look at 2000’s
numbers to be a true indicator
of company valuation.
Based on 2000’s EBITDA,
Vincor could buy Goundrey for
an earnings multiple of 10.75,
which represents a very
reasonable valuation for the
company.
Thus, the cost of entry test
shows that the acquisition of
Goundrey at $64.5 million is a
reasonable price.
Better Off Test
The only thing holding up this
deal is the lack of apparent
synergies.
Goundrey is located on the
other side of the world of
Vincor, and so there can be
almost no synergies gained
from sales and distribution
network overlaps.
However, Goundrey’s CEO
needs to sell the company for
personal reasons. If he is
unable to sell the company to
a more focused management
team, the company may
continue to flail. For this
reason, it appears Goundrey
would be better off if bought by
another company.
Based on the attractiveness
test, we see that Goundrey fits
many of Vincor’s goals.
Australia represents a strong
market for Vincor to gain
domestic market share, and
locationally it could one day
act as a strong distribution
center for exports to Asia and
the United Kingdom.
For this reason, it is my
conclusion that these
companies would be better off
together than apart.