Duckhorn sale completes trio of major deals

Duckhorn Wine Company has been sold to a private equity firm for an estimated US$250m.

GI Partners bought out 80 individual investors, a majority interest, in the 321-acre winery, for a price said to exceed US$250 million.

Aside from its winery in St Helena, Duckhorn owns Paraduxx, which makes a Napa red blend, and Goldeneye, which produces Pinot Noir in the Anderson Valley in Mendocino County. GI Partners, based in London and in California, holds more than US$2bn in assets, among them a UK pub chain.

The sale comes hot on the heels of two major deals. Warren Winiarski has just announced the sale of Stag’s Leap Wine Cellars for an estimated US$185m to Ste Michelle of Washington State and Italian producer Antinori.

And the giant E&J Gallo, American’s second-largest producer, has bought William Hill Estate, with 145 acres of first-class vineyards, and the popular Canyon Road brand, both from Beam Wine Estates. The price was not announced.

One inducement for producers to sell to corporate interests is the US$275,000 per acre that prime Napa farmland fetches.

Many wish to maximize profits while avoiding the kinds of financial problems and infighting that in 2004 led the Robert Mondavi family to sell its assets to Constellation Brands, America’s largest producer.

Another lure is an ageing generation’s desire to enter another phase of life. Mike Grgich of Grgich Hills, a top Napa producer, pinpointed a key issue. ‘This is America,’ he told Agence France Press. ‘You cannot force your children to stay in your business.’

Written by Howard G Goldberg in New York