Antigal: Brand and Company Value of a Family-Controlled Wine Business

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At the end of 2018, Francesco Cartoni was concluding his first MBA term when he decided to start working as an executive assistant for his family company, Antigal Winery (Antigal). Antigal encompassed three companies. Two were based in Mendoza (Argentina): Cepas del Sur S.A., which owned the vineyards, and Botega Antigal S.A., which performed the wine production. The third company, Cork Alliance Inc., was a wine wholesaler and importer/distributor based in Miami, Florida (US), that owned a special license to import alcohol. In past years this company structure allowed Antigal to achieve a wide distribution in the US and gain higher profit margins. However, after Francesco joined the company and decided to expand distribution in China, Antigal's sales started to grow significantly in Asia as well. Francesco wanted Antigal to have an even greater presence in China, but once he joined the company, he wanted first to have a clear idea about the value of Antigal. Francesco and his siblings spent the following months collecting any relevant information, and with the help of his accounting professor, they started to make an accurate company evaluation. To provide a comprehensive view of Antigal, this case study analyzes the company's past performance. By using financial ratios, common size analysis and trend analysis are performed. Then, to evaluate the company value of Antigal, two evaluation methodologies are applied: (i) Multiples and (ii) Discount Cash Flow (DCF). The case study also shows the limits of these two techniques and proposes alternative methods. In evaluating the company, many issues are considered: What is the best way to evaluate Antigal, which encompasses companies located in different countries? What is the best method to account for the high inflation rate in Argentina? How could global economic trends, such as the burst of the COVID-19 pandemic, and wine industry trends, impact Antigal's future growth? Antigal recorded stable sales in the
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