Duckhorn Wine Company, a St. Helena winery, has bought the Hopland winery that houses Rack & Riddle.
Duckhorn will not be taking over the Rack & Riddle custom crush business, and intends to eventually use the space to make wine for its own brands, said Duckhorn CEO and President Alex Ryan.
The move is part of Duckhorn's growing expansion beyond Napa County. Ryan characterized the acquisition of the facility, just a few miles north of the Mendocino-Sonoma county line, as part of a push to expand the company's Sonoma County portfolio.
“We made a huge commitment to Sonoma County with our Decoy brand, and it's been growing really well,” Ryan said. “Long-term, we feel like production capacity will be one of the Achilles' heels of the business, and this came up as a rare opportunity.”
Financial terms were not disclosed, but according to public records, the Rack & Riddle property was valued at $24.6 million at the end of 2012.
The winery property was owned by Kansas City-based EPR Properties, which has been unloading winery assets since the recession. The Rack & Riddle business will eventually move out, likely within about a year, Ryan said.
“I envision it being a home to our Decoy brand and overflow capacity for the whole company,” Ryan said.
Rack & Riddle, which rents the facility and serves more than 150 clients, hopes to stay longer and to have a permanent presence in the building, said spokesman Brian Sobel. There will be no immediate impact on the company's approximately 50 employees, he said.
Even so, Rack & Riddle is searching for a crush space.
“For better than a year, we've been looking to find another facility because we are in expansion mode,” Sobel said.
He added that Rack & Riddle is excited to work with Duckhorn.
“Going from a company that was a real estate company to a wine company that certainly understands the intricacies of the production of wine ... that is a good outcome.”
The winery deal, which closed Thursday, includes 130,000 square feet of production space in warehouses and covered areas and equipment that can process 6,000 tons of grapes. It also included 25acres of cabernet sauvignon and syrah grapes and irrigation ponds, Ryan said.
Duckhorn also bought the 15-acre Brown Owl Vineyard, located between Healdsburg and Geyserville, from EPR on Thursday.
A year ago Duckhorn, which produces more than 200,000 cases of wine per year, bought Ridgeline Vineyard, a 400-acre property with 90 planted acres in Alexander Valley, from Artesa Vineyards & Winery. Duckhorn is owned by GI Partners, a Menlo Park investment firm.