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Hot Spring for Northwest Acquisitions

Bacchus, Precept, Jackson invest in Washington and Oregon vineyards

by Peter Mitham
northwest vineyard purchases
Precept Wine Brands' acquisition of the Yamhela property is among the recent vineyard transactions in the Pacific Northwest.
Salem, Ore.—The brakes are off acquisition activity in the Pacific Northwest, which has seen its busiest season of deal-making in years as hundreds of acres of Willamette Valley vineyards have changed hands.

The latest deals saw Jackson Family Wines acquire an additional 280 acres of vines in the Eola-Amity Hills and Yamhill-Carlton AVAs and Precept Wine Brands acquire the 374-acre Yamhela property, also in the Yamhill-Carlton AVA.

The deals continue the sale of properties formerly managed by Premier Pacific Vineyards Inc. on behalf of the California Public Employees Retirement System (CalPERS), portions of which Jackson Family Wines acquired as part of a deal reached in March for more than 800 acres. Jackson Family Wines’ latest deal fulfills speculation at the time that it had gone firm on 1,100 acres of property west of Salem, Ore. (see “California Cash Flows Into Northwest”).

Precept Wine’s purchase brings its planted acreage in Oregon to 600 acres, and CEO Andrew Browne expects the next two vintages to see plantings increase by 120 acres. The purchase was driven by the proven capabilities of the site, and the fact a portion was already in production—cutting down time from development to production.

“We could have chosen to go plant, but we could have chosen to go purchase, and the economics worked out the same. Now we’re going to get grapes sooner than us going planting,” Browne told Wines & Vines.

Browne wouldn’t disclose the terms of the purchase, but the price was competitive.

“We didn’t underpay, we definitely didn’t overpay, either,” he said.

Grapes from the property, which is planted to Pinot Noir, will be channeled to Precept’s existing production as well as new brand opportunities.

Precept Wine is the largest privately owned vintner in the Pacific Northwest and has acquired several vineyards and wineries since 2010 (see “Precept Wine Buys Ste. Chapelle”).

Based in Seattle, Wash., Precept sold 950,000 cases in 2012 and hopes to break 1 million cases this year. It continues to seek growth opportunities.

“We’re still looking at vineyard opportunities in all those markets, and the same thing from a branding standpoint,” Browne said.

But it’s not the only investor in the Pacific Northwest industry.

One of the companies making major in-roads is private equity firm Bacchus Capital Management LLC, a venture of former Seagram and Diageo executive Sam Bronfman and partners Peter Kaufman and Henry Owsley of the Gordian Group.

Bacchus has made significant capital investments in Joe Dobbes’ venture Wine by Joe, and this week it announced an investment of capital to support the growth of Woodinville, Wash.-based DeLille Cellars as well as the purchase of Panther Creek Cellars of McMinnville, Oregon.

Bacchus, like Precept, is private and doesn’t disclose financial details, but the moves represent an ongoing move of California capital into the desirable Pacific Northwest market.

Greater availability of capital, supported by confidence in strengthening wine sales, are largely seen as responsible for heightened transaction volumes in the Pacific Northwest, which remains affordable relative to other premium growing areas.

“On a dollar basis, when you measure it against what you can do in California, it looks like a great opportunity,” remarked Mario Zepponi, a partner at Zepponi & Co. in Santa Rosa, Calif., when the initial deals closed in March. “Good things are yet to happen, and are coming in the Pacific Northwest.”

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