Sbragia gets 'significant' infusion from S.F. private-equity fund

Sbragia Family Vineyards, a Dry Creek Valley-based maker of higher-end wines, received a "significant equity investment" from a wine-focused fund in San Francisco.

[caption id="attachment_42710" align="alignright" width="293" caption="Adam, Kathy, Kevin, Gina, Jane and Ed Sbragia"][/caption]

The undisclosed size of the stake Bacchus Capital Management, LLC, took in the 10-year-old business will help the brand expand, according to Ed Sbragia, founder, president and winemaster. In 2008 he retired as winemaster for St. Helena's Beringer Vineyards after 32 years there to work on the family brand full-time.

"It's taken a lot of my time to work with current lenders, and we've gone through a couple of hard years," he said Tuesday after the announcement. "This will allow us to continue to grow and continue to expand in distribution and retail."

The Sbragia family started the brand in 2001 and acquired the Lake Sonoma Winery facility in 2006. Production this year is expected to be 12,000 cases. Wines range in price from $20 to $75 a bottle. The goal is to reach the winery's capacity of 20,000 cases annually in five or six years, according to Mr. Sbragia.

To get to that level, the business needed not only funding but also expertise, he said.

With the capital infusion, Sbragia Family Vineyards will be able to hire a few more in finance and administration. That will allow Mr. Sbragia and his winemaker son, Adam, to travel to markets nationwide to support the brand's sales manager, Treasury Wine Estates, which owns Beringer.

The funds also will allow Sbragia to purchase more grapes and float inventory costs for three to five years between harvest of each vintage and sale.

The family considered funding options from a number of sources, ranging from total buyouts with no further family involvement to partial stakes, according to Ed Sbragia.

"I wanted a partner," he said.

While the specifics of this deal weren't revealed, Bacchus' website says its investment fund goal is 70 percent debt investments and 30 percent private equity. This "flexible capital" ranges from senior secured debt to equity.

The Sbragia investment is the fifth investment for 4-year-old Bacchus Capital, the company's first equity stake and its fourth so far this year, according to Peter Kaufman, co-founder and managing partner. Bacchus' first investment was in October 2008 with a $3 million loan to fast-growing negociant Cameron Hughes Wine, which repaid the loan last year. New additions are Qupe and Pietra Santa on the Central Coast, Andretti Winery in Napa Valley, and Wine by Joe, Oregon's second-largest wine producer.

Sam Bronfman II, veteran of top management at Seagrams and Diageo's wine portfolios, started Bacchus in 2007 with Henry Owsley and Mr. Kaufman, top executives of New York-based boutique investment bank Gordian Group, which is general partner of Bacchus through an affiliate.

Other top management of Bacchus include Napa-based managing director Quinton Jay, former general manager of Artesa Vineyards and Winery.

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