Wines & Vines Home
   
 
Welcome Guest
LOGIN |  CREATE ACCOUNT
 
ADVERTISEMENT
 
 
 
05.03.2011  
 

Analysis: Winery Acquisitions on the Rise

Deals in Sonoma County reflect lots of M&A activity above and below the surface

 
by Paul Franson
 
 
buena vista boisset
 
Buena Vista winery and vineyard land was not included in Jean-Charles Boisset's purchase of the Buena Vista brand.
Napa, Calif.—Do a flurry of recent deals indicate the long-expected flood of California winery and vineyard sales has begun? Probably not a flood, though mergers and acquisitions expert Mario Zepponi says there’s been a good pick up in M&A activity above and below the surface.

Recent deals include:
• Patrick Campbell has sold his Laurel Glen Vineyard on Sonoma Mountain to private investors.
• The Buena Vista brand of Sonoma County to Boisset Family Estates from Ascentia Wine Estates.
• The Gary Ferrell brand and real estate in Sonoma County to Vincraft from Ascentia.
• The real property of Frazier Winery in Napa Valley to Zhang Winery of China.
• The Sonoma-Loeb brand to Chappellet Vineyards.
• Investment by Foley Family Wines into Crushpad, which moves into Foley-owned Sebastiani winery in Sonoma.

In addition, in the first quarter of the year, Diageo sold non-core brands Moon Mountain in Sonoma to a private investor, Echelon to Winery Exchange, and the Sagelands and Canoe Ridge properties in Washington state to Precept Brands. Also, Banfi Vintners bought Pacific Rim winery in Washington from Randall Grahm.

The deals don’t necessarily show a strong pattern, however. Frazier was in bankruptcy. Crushpad had been attempting to raise capital to finance its fast growth. Diageo was continuing to clean up its portfolio of minor brands acquired with targets like Chalone and Acacia.

The Sonoma-Loeb deal was an orderly transaction, as Chappellet had been making the wine and the owner of the brand was taking an expected step after 40 years in business and the need for transition planning.

Laurel Glen

Founder Patrick Campbell sold his 11-acre vineyard, small winery and Laurel Glen brand and inventory to a group of investors headed by Bettina Sichel, former marketing director at Quintessa Winery in Rutherford. The price was reported to be $4 million to $5 million.

In addition to the 11-acre vineyard, Sichel will lease an adjacent 5-acre vineyard. The property is permitted to produce 6,000 cases, but had been making about half that.

Sally Nicholson of International Wine Associates in Healdsburg, Calif., represented Campbell.

Cutting Ascentia’s debt
Ascentia’s case is perhaps unique. Ascentia needed to reduce the heavy debt it assumed when it created a highly leveraged company just as the economy sputtered in June 2008.

Ascentia was founded by industry veteran Jim DeBonis, who arranged financing from California private equity funds GESD Capital Partners and Golden State Investment Fund, and from wine marketer WJ Deutsch & Sons. Deutsch was responsible for Yellow Tail’s success in the United States, and overall it sells around 10 million cases of wine annually.

Ascentia used the cash to buy a number of wineries and brands from Constellation Wines, including California’s Geyser Peak, Atlas Peak, Buena Vista Carneros, Gary Farrell, XYZin, Washington’s Columbia Winery and Covey Run and Idaho’s Ste. Chappelle Winery. Zepponi & Co. handled the transaction.

Th e deal totaled $209 million. In turn, it cut a deal with Global Wine Partners for about $110 million to finance the real property and lease it back.

Ascentia seemed a star with a portfolio of nearly 1 million cases and strong marketing support from WJ Deutsch & Sons. Last year, however, the marketing deal came apart, and Ascentia and WJ Deutsch ending up suing each other and ending the sales pact.

Early this year, Mike Kenton became CEO of Ascentia and has focused on cutting the company’s crushing debt. Selling Buena Vista and Gary Farrell are major steps, but observers think more sales are to come.

Gary Ferrell Winery
Vincraft, a new company with impeccable executive credentials and strong financing, acquired the respected Gary Farrell brand and its winery in Healdsburg as well vineyards in Russian River Valley. It is known primarily for Pinot Noir and Chardonnay.

The rumored price was more than $20 million. Vincraft already owns the Kosta Browne Winery, another respected supplier of Pinot Noir. The Gary Farrell brand's annual volume is 25,000 cases. Vincraft’s CEO is Pete Scott, a former Beringer executive, and the other founders are former Beringer CEO Walt Klenz and Bill Price of the Texas Pacific Group (Now TPG), which acquired Beringer and sold it to Fosters. They formed Vincraft in 2008.

Buena Vista Vineyards

Jean-Charles Boisset acquired the venerable 35,000-case Buena Vista brand for a reported $9 million, but he would not confirm the price.  The deal is for the brand only. Boisset also will lease the historic, original Buena Vista stone winery just outside the town of Sonoma. He is not buying the larger Buena Vista winery and vineyard land in nearby Carneros.

Buena Vista recently had been orphaned when Ascentia planned to turn it into a generic Sonoma brand and abandoned its Carneros vineyards and roots.

Boisset, who has acquired DeLoach in the Russian River Valley, Lyeth Vineyard in Alexander Valley and Raymond Vineyards in Napa Valley, has proven that he knows how to create an image, and he’s sure to play up Buena Vista’s roots as the oldest premium Northern California winery as well as its historic building in Sonoma.

The tasting room in the historic winery will continue to offer wine country visitors an experience of wine, food and history in the original stone buildings.

Boisset, who is French, says Buena Vista is the first California winery he ever visited. “It’s the gateway to Sonoma and Napa Valleys.” He says he plans to acquire the historic winery; for now, he’s leasing it from VinREIT, the partnership with Entertainment Properties Trust that owns it.

Boisset has signed a long-term contract to source grapes from the existing 500-acre Ramal Vineyard Estate Buena Vista had used. Buena Vista will continue its focus on Pinot Noir, Chardonnay, Merlot and Syrah.

Vinum Capital Management, a private equity management company focused on the wine industry, said that it facilitated the financing and structuring of the transaction over several months leading up to the agreement for Boisset Family Estates to acquire the Buena Vista Carneros winery from Ascentia Wine Estates and Entertainment Properties Trust.

Frazier Winery
The former Frazier Winery production facility, vineyards and caves in east Napa’s Coombsville district have been sold to Zhang Winery of China.  The Frazier family will retain the Frazier brand and will keep all existing wine inventory. It plans to produce the wine at the Somerston facility in the hills east of Napa Valley. The winemaker is Kirk Venge.

Frazier was in bankruptcy proceedings and had been trying to sell the property for some time. The sale was brokered by Napa Valley brokers Robyn Bentley of Pacific Union and Peggy Burgess of Sotheby's International. Ming Hua of Dawa Investment & Realty of Pasadena represented the buyer.

The rumored price was half the original asking price of $16.5 million, but it did not include the residence adjacent to the winery, 20 acres of vineyard and caves.

Little is known about the buyer. Many Chinese investors have been kicking tires in Napa and Sonoma according to observers, but most are looking for bargains, not significant deals.

Sonoma-Loeb
In the final deal, and one with no apparent downside, Chappellet Vineyard & Winery has acquired Sonoma County’s Sonoma-Loeb wines.

Sonoma-Loeb was founded by Ambassador John L. Loeb Jr., who began growing grapes in the Russian River Valley and Alexander Valley in 1973. Sonoma-Loeb produces Sonoma County and Carneros Chardonnays and a Russian River Valley Pinot Noir.

For more than 20 years, Sonoma-Loeb wines have been made at the Chappellet winery on Pritchard Hill by Chappellet’s winemaker Phillip Corallo-Titus, who will continue making both wines. Production for both portfolios will remain at the Chappellet winemaking facility.
 
Ambassador Loeb decided to sell Sonoma-Loeb in recent months and immediately recognized the synergies between his company and Chappellet
 
Chappellet owner and managing director Cyril Chappellet said, “The two wineries have very different focuses and styles. Chappellet is a Napa Valley winery with a focus on Bordeaux varietals. Sonoma-Loeb makes Burgundian varietals from Sonoma County. Because we believe in the importance of maintaining the integrity and distinctiveness of both Chappellet and Sonoma-Loeb, these differences were important to us when we were considering the purchase.”
 
Sonoma-Loeb produces 8,000 to 9,000 cases of wine per year. They will continue to use the same vineyards, which include Sangiacomo Vineyard and Dutton Ranch.

More de als?
Will more deals happen? Stephen Kuhn, CEO of Vinum Capital Management, said, "We believe that the industry cycle is showing a great combination of rising consumer demand and falling asset values, and that this is a great time for us to invest. We continue to pursue acquisitions and management of premium wineries and the expansion of our sales and marketing business."

Mario Zepponi agrees, and Robert Nicholson, who handled both the Pacific Rim and Laurel Glen sales, added, “It’s been a difficult two years. We’re coming out of that, and people sense that it’s a better time to do transactions.”

He noted, however, that while some buyers are still focused on bargains, others value over-performing properties. “Some buyers will still pay top value for prime assets.”

SHARE »
Close
 
Currently no comments posted for this article.
 
CURRENT NEWS INDEX »


 
Wines & Vines Home
 
866.453.9701 | 415.453.9700 | Fax: 415.453.2517
65 Mitchell Blvd., Ste. A San Rafael, CA 94903
info@winesandvines.com
Wine Industry Metrics
 
Off-Premise Sales » Month   12 Months  
August 2014 $558 million
5%
$7,613 million
6%
August 2013 $531 million $7,167 million
     
Direct-to-Consumer Shipments » Month   12 Months  
August 2014 $78 million
17%
$1,686 million
10%
August 2013 $67 million $1,530 million
     
Winery Job Index » Month   12 Months  
August 2014 218
12%
224
19%
August 2013 194 189
     
 
MORE » Released on 09.15.2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Practical Winery & Vineyard Library
 
Search the PWV archive »
 
 

Direct To Consumer
Wine Shipping Report
2014
 
Download full report »
 
 

CALENDAR
  • October 8
     
    Exporting Wine to China
     
  • October 10-13
     
    Celebration of Harvest Weekend in Santa Barbara
     
  • October 16-19
     
    Martha's Vineyard Food & Wine Festival
     
  • October 17-19
     
    Harvest Wine Weekend in Paso Robles
     
  • MORE »
 

READER COMMENTS
 
Article: Optimization of limited water resources in irrigated vineyards »
 
Very interesting article! Sap flow monitoring was in the past mostly used for research but...
Reader: Virginie Scoarnec
 
Article: New York OKs Out-of-State Grapes »
 
If the resultant wine, using out of state juice,bears the "American" on the label, I...
Reader: Guest
 
Article: Financial Impact of Napa Quake Rising »
 
I still think the numbers are low and don't include legal fees. Section 165 was...
Reader: Guest
 
Article: Tasting the Effects of Wine Closures »
 
In addition to oxidation of somee of the SO2, post-bottling chemical changes are a continuation...
Reader: Guest
 
Article: Tasting the Effects of Wine Closures »
 
I agree with the 14:46 post. I have switched to screwcap on most of my...
Reader: Chris Baker
 
 


Directory/Buyer's Guide — Your Wine Industry Marketplace
 
 
WINERY SEARCH
 
 
Advanced Search »
SUPPLIER SEARCH
   by Product
 by Company Name or Brand
 
Browse by Category »
2014 Directory/Buyer's Guide
The Wines & Vines Directory and Buyer's Guide
 
 
EXPANDED ONLINE SEARCH INCLUDED WITH PURCHASE
 
ORDER NOW »
 
LEARN MORE »
 
 
Wines & Vines Magazine
 
 
LEARN MORE »
 
SUBSCRIBE »
 
Digital Edition Now Available!
Wines & Vines Digital Edition Now Available
 
LEARN MORE »
 
ORDER NOW »
 
 
The Wines & Vines Online Marketing System
 
The Industry Standard winery marketing application
 
FREE LIVE DEMO »
 
VIEW VIDEO »
 
 
 
 
Latest Job Listings
 Graphic Designer / Sup...
 Somerville, MA
Sales and Marketing
 Cellar Worker Iii
 Yountville, CA
Winemaking and Production
 Servers & Sommeliers F...
 Napa, CA
DTC, Tasting Room and Retai
 Tasting Room Sales And...
 Sebastopol, CA
DTC, Tasting Room and Retai
 Team Member
 Healdsburg, CA
DTC, Tasting Room and Retai
 Tasting Room Ambassado...
 Sonoma, CA
DTC, Tasting Room and Retai
 Barback & Hospitality ...
 Sonoma, CA
DTC, Tasting Room and Retai
 Outreach & Communicati...
 Atascadero, CA
General Administration and
 Assistant Manager, Ret...
 Cupertino, CA
DTC, Tasting Room and Retai
 Shipping Clerk
 Milpitas, CA
General Administration and
 
More Job Listings >>
Follow Us On:
 
 





Home  |  About Us  |  Editors  |  Subscribe  |  Print Edition  |  Digital Edition

Advertise  |  Site Map  |  Contact Us  |  Privacy Policy
 
 
Copyright © 2001-2014 by Wine Communications Group, Inc. All Rights Reserved.
No material may be reproduced without written permission of the Publisher.
Wines&Vines does not assume any responsibility for any unsolicited manuscripts or materials.