Diamond Estates Winery,maker of the wine line for Kingston area star Dan Aykroyd, is expanding its production site through the sale of up to $8.8 million in shares.
An early December announcement outlined an agreement with Paradigm Capital and GMP Securities to sell upwards of 22.73 million common shares at 22 cents per share, that would account for gross proceeds of up to $5 million.
Soon afterwards, Diamond Estates reported it would increase their offering to 36.36 million common shares due to positive investor response, increasing potential gross proceeds up to $8 million.
In a release, the company said it will use the funds primarily to “expand principal wine production facility and to add cooperage (barrel storage), warehouse and bottling space.”
It estimates wine processing, ageing and bottling operations will be increased by about 50%, due to a combination of operational efficiency improvements and increased capacity. That increase is forecast to result in higher profit margins on incremental sales volume.
“We are very pleased by the response to our offering in the financial community,” said President & CEO of Diamond Estates, Murray Souter. “Our business is benefitting from a number of very positive factors including our strong brand portfolio, broad industry growth, our strength in the VQA segment, the introduction of wine into the Ontario grocery channel and robust export growth.”
Souter added, “With the increased capacity, we will be well positioned to meet the increasing market demand, which will generate stronger returns for shareholders. The additional investment will allow Diamond Estates to significantly advance its growth plans and will accelerate the expansion of our core business.”
According to coverage by Country Guide, along with LCBO outlets there are up to 70 grocery stores in Ontario authorized to sell domestic and imported wine and the province has announced increasing that number to 300 stores.
Diamond Estates states on its website that the winery, under the watchful eyes of award-winning winemakers Scott McGregor and Tom Green, is home to a wide selection of top-selling VQA Ontario wines, including Lakeview Cellars, EastDell Estates, 20 Bees, FRESH wines, 1914 wines and Canadian acting legend Dan Aykroyd’s line of wines. The winery produces a full range of red, white and rosé table wines, icewine and other dessert wines.