Three prominent Sonoma County wineries are returning to local ownership in a $234 million wine deal that overnight creates a powerful new wine company based in Healdsburg.
Constellation Brands Inc., the largest wine company in the world, announced Tuesday it has sold seven wine properties in California, Washington and Idaho to the newly formed Ascentia Wine Estates.
Constellation, which has been aggressively buying wineries for several years, said it was selling the wineries in an effort to streamline its overflowing wine portfolio.
The deal includes 646 acres of vineyards and wine brands producing more than 1 million cases a year, instantly making Ascentia one of the top Sonoma County-based wine groups.
"This creates a major new wine company that has strong distribution clout in the marketplace," said Robert Nicholson, principal of International Wine Associates, a Healdsburg firm that served as adviser to Constellation on the deal.
The new company takes its name from an Alexander Valley cabernet sauvignon vineyard owned by Geyser Peak winery in Geyserville, one of the Sonoma County wineries included in the sale.
The others are Buena Vista Carneros in the Sonoma Valley, the oldest winery in California, and Gary Farrell Vineyards & Winery in Healdsburg, a famed producer of high-end Russian River pinot noir and chardonnay. A small zinfandel brand called XYZin produced at Geyser Peak is also part of the deal.
The new company will be headed by Jim DeBonis, a former executive at Beam Wine Estates, the former wine division of Fortune Brands. Peter Ekman, the former chief executive officer of Wine.com, will be chief sales and marketing officer.
The company has financial backing from a number of investors, including the San Francisco-based private equity firm GESD Capital Partners and W. J. Deutsch & Sons, Ltd., a wine sales and marketing firm based in White Plains, N.Y.
The sale includes three of the four Sonoma County wineries Constellation acquired in December when the Fairport, N.Y., company bought Beam Wine Estates from conglomerate Fortune Brands for $885 million.
Constellation decided to keep the 2 million-case Clos du Bois winery in Geyserville, the best-selling U.S. wine from $9 to $12, and the 200,000-case pinot noir specialist Wild Horse Winery & Vineyards on the Central Coast.
But the purchase left Constellation's massive portfolio brimming with North Coast brands and wineries it didn't need. There was particular overlap between Geyser Peak and existing Constellation sauvignon blanc brands like Nobilo and Monkey Bay from New Zealand, said Chris Fehrnstrom, president of Constellation's VineOne division.
"We're already very strong in the sauvignon blanc segment, and it's kind of difficult to have another sauvignon blanc like Geyser Peak without starting to compete against ourselves," Fehrnstrom said.
Also included in the deal is Atlas Peak, a high-end Napa wine brand made from mountain vineyards. The deal does not include the Atlas Peak vineyards or winery. Those properties, located in a valley high in the mountains east of Napa, are under lease but will revert later this year to famed Italian vintner Marchese Piero Antinori.
DeBonis, who was chief operating officer at Beam Wine Estates when Constellation bought it, was deeply involved in the development of the California brands, particularly Atlas Peak and Buena Vista Carneros, he said.
"This really lets me finish what I started," said DeBonis, who visited the Pacific Northwest wineries yesterday.