Buyers remain king in Napa wine mergers, experts say
The Business Journal’s Impact Napa conference addressed the wine industry mergers and acquisitions, Napa Valley tourism and a one-on-one interview with wine industry icon Christian Moueix.
Moderated by Hal Forcey of Forcey Appraisals, the Merger and Acquisitions panel noted domestic winery M&A activity has been on a roller coaster since 2011, with 27 in 2016 and about 14 so far this year, according to wine attorney Richard Mendelson.
Carol Collison, partner in Global Wine Partners, said some deals don’t go through because of either an unrealistic selling price or seller assumption of a “bidding war” when actually there might be only one potential buyer who has a limited bandwidth and other offers coming in.
Sean Maher, partner in Aspect Consumer Partners, said sellers need to prepare.
“Anticipate having to explain your growth strategy, have key accounts and contracts in order, show areas of opportunities for growth and know what buyers want and who they are,” Maher said. “Establish relationships with experienced advisers: M&A, legal, accounting It is essential to have a skilled team that will run a focused and organized sale process that will maximize value.”
Chirstian Moueix, president of Etablissements Jean-Pierre Moueix, the leading wine company of Bordeaux’s Right Bank and owner of Dominus Estate in Yountville and Ulysses Vineyard in Oakville, dismissed the idea of allowing exceptions, called “variances,” to county regulations on size and number of wineries.
“No variances, no variances, no variances,” he said. “Life would (be) so much more simple. How stupid can you be? It is a paradise which you are ready to destroy.”
Clay Gregory, president and CEO of Visit Napa Valley, said,“The fires slowed our business, and we could never catch up.”
The event was underwritten by Bank of Marin and Dickenson Peatman & Fogarty of Napa.