Billionaire Bill Foley's pending purchase of Chalk Hill Winery in Sonoma County adds the prestige and clout that his growing wine empire needs, he said Tuesday.
"I'm trying to build a portfolio of really fine wineries," said Foley, president of Foley Family Wines. "Chalk Hill Winery is an iconic brand."
His deal with Chalk Hill owner Fred Furth, disclosed two weeks ago, signaled his highest profile move into the wine industry.
But Foley, 65, said he doesn't expect to stop with Chalk Hill Winery. He is looking to acquire a Napa Valley winery of equal size and prestige.
"I still need a Chalk Hill-type property in Napa to round out my portfolio," he said Tuesday from his small administrative offices in Sonoma.
Together, Chalk Hill Winery and the right Napa Valley winery would give Foley Family Wines greater recognition in the wine industry and the ability to push its lesser-known brands, he said.
Foley plans to live on the Chalk Hill estate. He said his transition into the wine business was really a lifestyle choice, and he was quick to joke about his age and inexperience in the industry. But when it comes to the financials, his eyes sharpened and he was all business.
"I'm making money, and I intend to continue making money."
He has centralized the financial management of all his wineries into the small Sonoma headquarters, and he shows little tolerance for what he considers redundant jobs or people who don't meet his goals.
"I really think you need to be an efficient operation," he said.
Foley purchased his first winery less than 15 years ago and is now among the top 30 U.S. wine producers. The company owns more than 10 wineries, including his 2008 acquisition of Sebastiani Vineyards and Winery. He moved the company's headquarters next to the Sebastiani winery in Sonoma. In all, Foley Family Wines produces about 800,000 cases of wine annually.
Chalk Hill Winery currently produces 43,000 cases a year, but it adds far more than sales volume; it adds clout to the Foley Family Wines brand, Foley said.
"It's a perfect tier in my portfolio of wineries," he said.
Most Chalk Hill wines sell for $20 to $50 a bottle, but reserve wines reach into the hundreds of dollars.
"It kind of brings us a halo over our other brands," said Andrea Smalling, vice president of marketing at Foley Family Wines. "It'll open doors for us."
Foley plans to increase production at Chalk Hill Winery by a third.
"We should be at 57,000 cases," he said.
Foley declined to say how much he agreed to pay for the 1,270-acre Chalk Hill estate, which includes all its buildings, the winery, a pavilion, equestrian center and several houses, including the palatial main residence. The deal also includes 278 acres of vineyards set in oak-studded hillsides east of Windsor.
Sources close to the deal said the purchase price is in the range of $70 million. The transaction is scheduled to close July 9.
"I'm not anticipating any hiccups," Foley said of the deal. "I haven't found anything that is surprising."
Foley made his fortune building the nation's largest title insurance company, Fidelity National Title. He purchased his first title company in 1984 and quickly began adding other title companies. By 2003, the company was number 262 on the Fortune 500 list and generated more than $10 billion in annual revenue.