Increased wine mergers and acquisitions activity anticipated this year likely won’t be dominated by troubled-finance sales, according to one of the experts at the Business Journal wine business conference Thursday.
Yet sales of wine over $25 a bottle will be closely watched this year to see whether there will be a rebound, albeit slow, to a pre-2006 level of North Coast high-end prices. Or it may be that brands and assets currently structured for high-end operations will have to be revalued if the current largely under-$35 market persists, according to Mario Zepponi, a principal of wine industry transaction brokerage Zepponi & Company in Santa Rosa.
“Our expectation is that there will be more M&A activity this year than last year,” he said. “People think it is because more owners are in trouble, but that’s not the case.”
Mr. Zepponi will be part of a panel on mergers and acquisitions at the Business Journal’s Wine Industry Conference 2011 on Thursday morning. A sell-out audience of 450 also will hear from M&A panel members Peter Byck of Winery Exchange, Bill Foley of Foley Family Wines, Dan Leese of V2 Wine Group, Stewart Resnick, owner and chairman of Roll Global that includes and Justin Winery and Vineyards, and Pete Scott of The Vincraft Group.
Two motivations for a number of anticipated wine business sales this year are shareholder or partner disagreements and “owner fatigue,” Mr. Zepponi said.
Multiple owners provide ample opportunities for disagreements over company management, he said. But those differences easily grow wider when an operation has no majority owner or a majority owner and a holder of a substantial minority stake.
“Sometimes, the best way is that they say they can’t work together, so they sell and go to work on their ideas separately,” Mr. Zepponi said.
Other times, owners in the industry for many years may not want to continue with the demands of the business or move on to another venture, a situation commonly called “owner fatigue,” he said.
The conference also includes a direct sales and social media panel, consisting of Ron Denner of Denner Vineyards, Larry Dutra of Adams Wine Group, Bill Leigon of Hahn Family Wines and Lisa Mattson of Jordan Vineyard & Winery.
The event will be held at the Hyatt Vineyard Creek Hotel & Spa in Santa Rosa, starting with registration at 7:30 a.m. To get on the waiting list for the event, call 707-521-5264.
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