California wine brands Stag’s Leap, Patz & Hall part of $1.2B Ste. Michelle Wine Estates portfolio deal
A New York private equity firm has inked a $1.2 billion deal with tobacco giant Altria to acquire Washington state-based Ste. Michelle Wine Estates, the third largest premium producer in the U.S.
The agreement with Sycamore Partners Management LP, announced Friday, includes about two dozen brands and nine wineries in Washington, California and Oregon plus 2,800 acres of vineyards, mostly in Washington. Ste. Michelle sources from nearly 30,000 acres of grapes in the three states. Total wine shipped last year was the equivalent of 7.3 million 9-liter cases.
The transaction is set to close in the second half of this year.
The brand portfolio includes North Coast vintners Patz & Hall in Sonoma Valley Conn Creek in St. Helena and Stag’s Leap Wine Cellars near Yountville. Stag’s Leap and Col Solare in Washington are operated under a joint venture with Italy’s Marchesi Antinori, whose imports Ste. Michelle also distributes.
Stag’s Leap produces around 100,000 cases annually, Patz & Hall about 20,000 cases, and Conn Creek around 7,000 cases, according to a spokesman.
"The Ste. Michelle leadership team and I look forward to working with the team at Sycamore Partners and believe we are well-positioned to help drive the next phase of growth. Their commitment to partnering with us is a tremendous vote of confidence in the team and our magnificent estates and brands," said David Dearie, president & CEO of Ste. Michelle Wine Estates, in a statement.
A Sycamore spokesman declined to comment on the deal.
Sycamore focuses on consumer, distribution and retail-related investments, according to its website. Recent deals have included $201 million for the upscale cruise line Azamara and the apparel brands Ann Taylor, LOFT Lou & Grey, and Lane Bryant.
If completed, this would be the third large wine acquisition involving North Coast brands following the Gallo-Constellation and Delicato Familiy Wines-Francis Ford Coppola Winery deals.
E. & J. Gallo Winery and Constellation Brands at the beginning of this year completed the $810 million sale of 32 brands, including Clos Du Bois and several based or launched in the North Coast.
Then last month, Napa-based Delicato Family Wines inked with Francis Ford Coppola to sell his Sonoma County wineries Francis Ford Coppola Winery and Virginia Dare Winery brands and the facilities, creating one of the top 10 suppliers of wine in the U.S. and exporters of California wine. That deal is estimated to be between $500 million and $1 billion.
Jeff Quackenbush covers wine, construction and real estate. Before the Business Journal, he wrote for Bay City News Service in San Francisco. He has a degree from Walla Walla University. Reach him at email@example.com or 707-521-4256.