SONOMA VALLEY -- Nearly five years after taking over cash-strapped Viansa Winery & Marketplace in Sonoma Valley, a New York-based hedge fund is considering a buyout offer from a former executive who quickly returned Viansa to profitably and has been running it since.
[caption id="attachment_64808" align="alignleft" width="378"] Lloyd Davis[/caption]
Lloyd Davis, former fund partner and chief credit officer turned president and part owner of the winery, recently submitted a bid of an undisclosed sum to acquire the share of Viansa held by Laurus Master Fund, Ltd.
"I love this property and want to own it," Mr. Davis said of his decision this past August to made a bid for it. "Part of me hopes nobody offers more than I'm willing to pay." If there is a higher offer, he wants to pursue another opportunity in the wine industry.
Because of Mr. Davis' ties to Laurus and part ownership in Viansa (800-995-4740, viansa.com), Laurus brought in St. Helena-based investment bank Global Wine Partners to market Viansa and negotiate with interested suitors. There is no date for a call for purchase offers, but a potential sale likely will be considered early next year, Mr. Davis said.
"The fund and I don't have to sell our positions," he said. "There's no big hurry. I just want to resolve this sooner or later."
[caption id="attachment_64585" align="alignright" width="440"] The first of Trefethen Vineyards' 2012 Hillspring Vineyard estate cabernet sauvignon is picked early on Oct. 5. (photo credit: Jon Ruel, Trefethen Vineyards)[/caption]
In December 2007, Laurus assumed ownership of Viansa via bankruptcy court on account of tens of millions of dollars in loans to 360 Global Wine Co. A month later, Mr. Davis, a wine aficionado for more than three decades, eagerly stepped in to run Viansa.
When Laurus finally took ownership, the winery and its Italian food--oriented visitors center still had serious financial problems. 360 Global had amassed more than $40 million in debt just from Laurus, its largest creditor, largely to finance the $31 million acquisition of Viansa from the Sebastiani family in 2005.
In March 2007, John Bryan of Los Angeles-based corporate turnaround firm The Watley Group was put in charge of Viansa to deal with plummeting sales, hundreds of creditors, unpaid bills, depleted inventories, missed wine shipments and spooked tourists. Laurus had valued Viansa at $10 million at that time. Sales had fallen to $4.3 million a year from $15 million five years earlier, and annual visitors scaled back to 50,000. Mr. Bryan managed about $6 million in further investment in the winery business in upkeep and boosting the number of visitors, wine club members and sales.
Mr. Davis took over winery management in January 2008 and by mid-year had cut operational expenses by up to 35 percent, stopping the flow of red onto the winery's income statement.
"A lot of that was running Viansa like a business and looking at every expenditure to see if it was necessary," Mr. Davis said.
Such analysis to trim cost while maintaining quality led to cutting the phone bill by a quarter by installing a new system, installing energy-efficient lighting and reminding staff to turn it off when unused, putting health and property-casualty coverage plans to bid, working with landscapers to focus on the essential upkeep for the extensive grounds and adjusting packaged-goods purchases so bulk purchases would be held and shipped incrementally.