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Carol Collison for eight years has been a partner of St. Helena-based Global Wine Partners LLC, a sell-side mergers-and-acquisition adviser and valuator.

She is set to be on the mergers-and-acquisitions panel at the Business Journal’s Wine Industry Conference on April 28.

Collison talked with the Journal about the significance of big wine M&A players moving back into buy mode after seven years and how they’re scrutinizing deal prospects.

What do recent acquisitions tell us about wine M&A?

CAROL COLLISON: I would characterize it as, the “animal spirits” have returned. I don’t know who coined the expression, but it describes a marketplace where people are feeling very positive, aggressive, willing to take risks. It hasn’t been there since the last major wine downturn in the wine market in 2009–2010.

The evidence for that is that in 2015 there were three buyers of brands — E&J Gallo, Jackson Family Wines and The Wine Group — that have not bought a brand of significance in over seven years. They have done a lot of real estate transactions, but that’s very different from an M&A transaction.

When those deals broke last year, it was, “OK, the big boys are back.” That’s created an environment in which everyone feels like the water is fine and come on in.

What types of buyers are looking for deals?

COLLISON: There are three types of buyers in the wine M&A market. The lifestyle buyer: They’re really not an M&A player. They just want a house with a vineyard.

The strategic guys are always in the market, but it just depends on type of buyer it is. The big guys are in high-quality, high-profile deals. The difference in 2009–2010 was it was guys in doing deals at discounts over asset value. The buyers are always strategic buyers, which is fine because they are already in the wine business.

We’re in a good space, because almost everybody is out there right now. Those looking for a discount over asset value are buying, and those looking for a good growth are also out there.

The third tranche of buyers are private equity. There are some rumblings that there are some financial buyers trying to get some things done. Those tend to be marquee deals as well.

What types of deals are in demand?

COLLISON: [Wineries, vineyards, brand-only, minority share, majority ownership and founder remains involved.] It is still a buyer’s market, notwithstanding all the activity. If you are a seller and what you have is not exactly what the buyer wants, you are not going to get a deal done.

There are so many transactions trying to happen, buyers know that if this deal doesn’t work there is another one coming along tomorrow. They are not being very creative in saying, “It’s not quite what we want but I’ll buy it and tweak it to make it what we need.” It has got to be plug and play.

Is this a part of the succession wave we’ve been hearing about?

COLLISON: Yes and no. The decision to sell is so idiosyncratic — wine is such a personal business — the willingness to face your own mortality is not always there.

Generally, when people see a lot of big transactions happening, they tend to think now is the time.

Is this market taking care of sales opportunities that have been lingering?

COLLISON: There are some deals that aren’t going to happen. The seller is just going to have to figure something else out.

How should owners be getting ready for a deal?

COLLISON: They should find an adviser who has been through the process and chat about ways to improve the likelihood of getting a deal done. That may mean killing unprofitable products or expanding three-tier on-premise sales that would improve the way the company looks.

But that’s balanced against the needs for confidentiality. Part of the reason that doesn’t happen as often as it should is people don’t want to let it be known they are thinking about a deal.

How does the deal volume in the North Coast compare?

COLLISON: I think when the dust settles there will be more deals done on the West Coast this year than the average, which is about 20. But it’s not going to be much over the average.

What changes is the size and spectacular nature of the deals, which gets everyone’s attention and leaves the impression there is a lot more going on. It’s still a thin market, and there are not as many deals as people think there are.

But if you have a solid business and it’s something these strategic buyers want, you can get a deal done.

What kinds of funding structures are going into wine M&A?

COLLISON: I think it is still a matter of the underlying assets in the transaction. The more real estate involved in the transaction for a given amount of valuation or purchase price the higher the leverage the buyer can get. The more real estate, the less likelihood the seller is going to have to provide some form of financing.

For brand-only deals, the buyer can’t get much leverage on the transaction. Same as it’s always been, the seller will have to provide some form of financing, depending on how much leverage they have in the number of buyers want to be involved in the deal. All buyers look for maximizing leverage, whether they have endless amounts of funding or not.

It’s the wine business, man. It’s very capital-intensive, and there are all kinds of things you have to stick your money in, like inventory growth.

Where is the wine succession wave?

COLLISON: There are only so many people who are going to get through the exits. That does not have a lot to do with how many people want to get out. Statistically, are there a lot of people who started in the wine business in the 1970s and 1980s who want to get out? Yes, but can they get out? No, there not that many buyers, and that is not going to change.

There is that immortality factor in the wine business. There are plenty of people who probably should get out, but have they made any moves to get out? No. Will they? No.