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Headlines Winery Acquisitions Up Deals in Sonoma and Napa reflect M&A activity N apa, Calif.—Do a flurry of recent deals indicate that the long-ex- pected flood of California winery and vineyard sales has begun? Probably not a flood, though mergers and acquisitions expert Mario Zepponi says there's been a good pick up in M&A activ- ity above and below the surface. Recent deals include: • Patrick Campbell has sold his Laurel Glen Vineyard on Sonoma Mountain to private investors. • The Buena Vista brand of Sonoma County to Boisset Fam- ily Estates from Ascen- tia Wine Estates. • The Gary Farrell brand and real estate in Sonoma County to Vincraft from Ascentia. • The real property of Frazier Winery in Napa Valley to Zhang Winery of China. • The Sonoma-Loeb brand to Chappellet Vineyards. • Investment by Foley Family Wines into Crushpad, which moves into Foley-owned Sebastiani winery in Sonoma. In addition, in the first quarter of the Buena vista winery and vineyard land was not included in Jean-Charles Bois- set's purchase of the Buena vista brand. was continuing to clean up its portfolio of minor brands acquired with targets like Chalone and Acacia. The Sonoma-Loeb deal was an orderly transaction, as Chappellet had been mak- ing the wine and the owner of the brand was taking an expected step after 40 years in business and the need for transi- tion planning. Vincraft, a new company with impec- cable executive credentials and strong financing, acquired the respected Gary Farrell brand and its winery in Healdsburg as well as vineyards in the Russian River Valley. The rumored price was more than $20 million. Will more deals hap- pen? Stephen Kuhn, CEO of Vinum Capi- tal Management, said, "We believe that the industry cycle is show- ing a great combina- tion of rising consum- er demand and falling asset values, and that this is a great time for us to invest. We con- year, Diageo sold non-core brands Moon Mountain in Sonoma to a private inves- tor, Echelon to Winery Exchange, and the Sagelands and Canoe Ridge properties in Washington state to Precept Brands. Also, Banfi Vintners bought Pacific Rim winery in Washington from Randall Grahm. The deals don't necessarily show a strong pattern, however. Frazier was in bankruptcy. Crushpad had been attempting to raise capital to fi- nance its fast growth. Diageo tinue to pursue acquisitions and manage- ment of premium wineries and the expan- sion of our sales and marketing business." Mario Zepponi agrees, and Robert Nich- winesandvines.com Learn more: Search keywords "winery acquisitions." olson, who handled both the Pacific Rim and Laurel Glen sales, added, "It's been a difficult two years. We're coming out of that, and people sense that it's a better time to do transactions. He noted that while some buyers are still focused on bargains, others value over- performing properties. "Some buyers will still pay top value for prime assets." —Paul Franson JUNE NEWS MARKET RESEARCH ENDOWMENT r. Liz Thach, a pro- fessor of manage- ment affiliated with Sonoma State Univer- sity (SSU), was named the first-ever F. Korbel & Brothers Professor in Wine Business. The three-year professorship, funded by Guerne- ville, Calif.'s 1.7 million-case Korbel Cham- pagne Cellars, will enable Thach to hire un- dergraduate research assistants and travel to distant industry events. SSU is one of only three universities in the world currently offer- ing a master's degree in wine business, ac- cording to Ray Johnson, director of the Wine Business Institute. NEWS BY TE S D winesandvines.com Learn more: Search keywords "Liz Thach." TEXAS PLANS WINE CENTER T he city of Fredericksburg in the heart of Texas wine country plans to build a Cen- ter for Wine and Culinary Arts. According to current plans, the center would serve mostly as a training location for visitors involved in the wine, culinary and hospitality indus- tries. Plans suggest a 25,000-square-foot facility with a wine-tast- ing room, restaurant and patio grill, demon- stration kitchen with tiered seating, hands- on kitchen, retail sales area and permanent classroom and event space. winesandvines.com Learn more: Search keyword "Fredericksburg." CANAL BREAK CUTS WATER T housands of customers in Placer County, Calif., including wineries, are dealing with water-use restrictions following the col- lapse of a major irrigation canal below the Rollins Reservoir near Colfax on April 19. Recommendations for affected grapegrowers include: Mow cover crops frequently to keep them and their water demands low; mulch between vineyard rows winesandvines.com Learn more: Search keywords "Placer County." to conserve water. Plan ahead to accom- modate interruptions in irrigation schedules. Develop a water storage plan for when your water is on. Wines & Vines JUne 2011 17