Accolade Wines, an Australian group that has become the world's fifth-largest wine company, announced a widely-expected deal Friday to acquire Geyser Peak Winery and two sister brands, Atlas Peak and XYZin, from Ascentia Wine Estates.
The acquisition is designed to spearhead Accolade Wines' growth in the United States.
"We think Geyser Peak has tremendous heritage and history," said Tim Matz, managing director of Accolade's operations in North America. "It's exciting to be a part of the Sonoma wine community."
Financial terms were not disclosed. An industry source estimated the Geyser Peak transaction closed for around $20 million.
As part of the deal, Accolade will lease the Geyser Peak winery and 98 acres of cabernet sauvignon vineyards outside Geyserville from the properties' owner, Entertainment Properties Trust.
Rumors of an impending sale had been swirling around Ascentia for weeks as the Healdsburg company sells off its remaining assets. Two weeks ago, Ascentia sold Ste. Chapelle Winery in Idaho to Precept Wine.
After the deal with Accolade, Ascentia would be left with Columbia Winery and Covey Run in Washington, which sources say are being sold to E&J Gallo Winery. A Gallo spokesman declined to confirm that a sale had gone through.
"Nothing will happen until Monday at the earliest," Gallo spokesman John Segale said late Friday. "There's a lot of documents and a lot of attorneys involved."
Jim DeBonis, who founded Ascentia Wine Estates, refused to answer questions Friday, but expressed gratitude to employees in a brief statement issued from his Healdsburg office.
"I am very proud of our great team of people at Ascentia Wine Estates," DeBonis said. "They have persevered through a number of challenges. It has been an honor to have led them for the past four years."
Accolade Wines is headquartered in Reynalla, South Australia, and has more than 1,600 employees worldwide, selling about 35 million cases per year. It was formed last year when Constellation Brands sold a majority stake in its Australian and United Kingdom wine business to an Aussie investment firm, CHAMP Private Equity.
"I think that transaction, with Accolade purchasing Geyser Peak, is all about access to the market for Accolade," said Mario Zepponi, co-owner and partner at Zepponi & Co., a winery brokerage firm.
"Geyser Peak is a nationally recognized brand that's distributed across America, and through the trade and the retail sector, and that gives us the opportunity to grow," Matz said.
Matz is Accolade's first employee in the U.S., he said. He declined to say whether any employees were laid off in the acquisition. Geyser Peak employees said they were told most would be kept on.
Ascentia's California properties, including the wine brands purchased by Accolade, together produced 395,000 cases of wine last year, down 3 percent from 2010, according to the Gomberg Fredrikson report, an industry marketing report.
Analysts said the ownership change would be good for Geyser Peak, and could help the region.
"It should be good for growers, it should be good for Sonoma to have a new, strong face in the marketplace," said Joe Ciatti, partner at Zepponi & Co.
"Here you have experienced owners of wineries," said Deborah Steinthal, founding partner of Scion Advisors, a Napa-based consulting firm. "This should give them a significant presence in the U.S.. The real question is: How do you rebuild the Geyser Peak brand, and make it stronger?"