Bankable wine industry M&A deals: Preparation is key for sellers


Catherine M. Vyenielo ( is senior vice president and senior relationship manager for Rabo AgriFinance in the North Coast.

We recently brought you the first in a two-part series on ensuring bankable wine industry merger and acquisition deals, highlighting considerations from the buyer’s perspective.

With the market for M&A deals remaining active, particularly so for strong-performing businesses, many winery and brand owners are questioning whether now might be the right time to sell.

While the reasons behind selling an asset like a winery or wine brand can be vast — and personal — the common theme in securing a smooth and favorable transaction is preparation. This second article in our two-part series explores the transaction process from the seller’s perspective, including insight from industry professionals.

To sell or not to sell

Deciding to sell your winery or brand is one of the most significant decisions an owner will make. Owners reach the point of sale for a variety of reasons.

Perhaps you have a successful brand and now is the right time to monetize this instead of continuing to take on debt.

Or, a well-performing but small winery may find that succession planning is going to be an issue and a sale will allow them to cash out and move on. In other scenarios it might only be the owner who is looking to leave the business and there is a buyer who wants to maintain the operational structure.

Whatever your “why” might be, before even considering going to market, Pat DeLong, founder and principal of Azur Associates advises that it’s imperative you ask yourself the following two questions:

  1. Does my business have a long track record of repeatable and sustainable strong cash flows?
  2. Have I consistently invested in my business to ensure my staff and my assets (vineyard, winery, hospitality and other facilities) are current, high quality and without significant deferred maintenance?

“If the answer to either of the questions above is no, you are likely not in a position to begin considering an M&A process and have years of work to do with your team, business, and infrastructure,” continued DeLong. “Once the answer to both questions above is yes, working with M&A professionals who have experience with transactions to prepare for a sale increases your ability to achieve favorable outcomes.”

Assembling your team and financials

Once you’ve done the work to determine that a sale is the smartest option for achieving your desired outcome, the next step is preparing your financial information and assembling a team of transaction professionals to guide you through the complex process.

To start, David Von Stroh, managing director of FoodBevAg, recommends that key players on your team include experienced M&A specialists, transaction attorneys, and an independent CPA firm.

These professionals are critical in guiding you through the process from start to finish, ensuring the transaction is documented properly with market terms, and that financial statements are prepared accurately to defend against any financial irregularities a buyer might uncover during their standard due diligence.

“A business looking to sell is viewed as serious about transacting when the owners and management are prepared for a potential sale,” said Von Stroh. “Preparing for a potential sale starts with ensuring the information shared with a potential buyer is accurate, readily available, and succinct.”

A seller should also consider certain specialty professionals to advise them. For example, DeLong cautions that a seller must understand the specifics of its winery entitlements today, as well as what might be possible in the future.

He notes, “Every buyer is going to understand in great depth water availability and water rights, as well as how production capacity and hospitality entitlements are impacted by current infrastructure and potential expansion. In some transactions these can become ‘gating’ items that determine the fate of whether a buyer chooses to proceed with a transaction or not.

Hiring professionals that understand how these entitlements work on your property and within your county is part of the planning process that should happen well before deciding to go to market, as it could uncover capital investment requirements to address any shortfalls.”

After the sale

So, you’ve prepared as much as possible, assembled a great team, and ultimately secured a favorable outcome for all parties in the transaction. Is the work now done?

Not quite. DeLong advises that an often-overlooked component of many M&A transactions is what happens after the deal is completed. Integrating professionals early in the process that understand how to assimilate a new team and business into your organization can have a material impact on the success of the transaction yourself.

This can include work around wholesale and direct-to-consumer (DTC) route to market, as well as cultural integration and management structure, critical to success and the appeal of the deal for the buyer.

As the wine industry is likely poised to continue to see an influx in M&A activity at all levels, buyers and sellers can both take steps to put themselves in favorable positions for attractive outcomes.

Simply, this comes down to advance preparation and having a team around you that understands today’s market conditions.


Catherine M. Vyenielo ( is senior vice president and senior relationship manager for Rabo AgriFinance in the North Coast.

Show Comment