Issue link: http://winesandvines.uberflip.com/i/867389
66 WINES&VINES September 2017 REAL ESTATE INTERVIEW reviewing and identifying assets that are to be retained by the seller and discussing the post-close plans for the seller. For example, do they want to remain with the business? The valuation or analy- sis of the brand and business is one of the first steps we take with our clients, followed by develop- ment of the information memo- randum and offering documents. Once IWA has completed the pre-planning, we finalize the tar- get list and initiate blind ap- proaches. IWA is very selective about the number and quality of targets we approach on behalf of our clients in order to maintain confidentiality, which preserves value for our clients. Following receipt of signed non-disclosure agreements from each target buyer, we send out the offering information memorandum. We then work with interested buyers as they develop their non-binding indications of interest, which summarize the details of their of- fers. We work with the seller to select the target (or targets), and with their legal counsel we work on drafting a letter of intent that commits the seller and the buyer to one another to complete the transaction. IWA manages the due diligence process, and we work with both sides to draft the sale agreement. IWA works with the seller on preparing for the close of the transaction. This includes, among other things, managing the final inventory count with the buyer, working with the seller, their em- ployees and the buyer on the tran- sition to new ownership—and all other outstanding items to ensure a smooth transition. Typically, the whole process takes six to 18 months, depending on the com- plexity of the circumstances. Teamwork throughout the pro- cess is critical to maintaining mo- mentum and avoiding delays, because all deals have a life of their own. It is important to control the issues as they come up and, where possible, to pre-plan the different steps rather than reacting to issues as they come up. The most fundamental require- ment to complete a deal success- fully is to maintain integrity and trust with all the stakeholders. Confidentiality is of critical impor- tance to avoid erosion of value for our sellers. Q What's the general state of mergers and acquisitions in the wine industry these days? Nicholson: Generally, the U.S. wine market is strong. Valuations are firm and increasing in certain areas for some assets. Some super- and ultra-premium sub-segments of the market are stronger than other sub-segments, but wine con- sumption is generally increasing. Wine companies are investing in vineyards to protect their sup- ply and to maintain margins in a tight grape market. Financial groups are investing in vineyards ON THE HORIZON R obert Nicholson of International Wine Associates can't get into too many specifics about deals he has in the works, but he will say that he's representing "a variety of sellers" along the West Coast. "We have a number of high-quality, ultra-premium wine estates in the Napa Valley, Sonoma County, Central Coast and Oregon," Nicholson says. He's also representing entities who want to sell vineyards in the Napa Valley, Sonoma County, the Central Coast and Washington, and he's working to sell "some substantial win- ery assets." As for vineyards, Nicholson says buyers are particularly interested in Pinot Noir and Cabernet Sauvignon from prestigious AVAs—Rus- sian River, Sonoma Coast, Santa Barbara, Santa Lucia Highlands and Oregon for Pinot; Napa Valley, Alexander Valley and Washing- ton's Red Mountain for Cabernet. They also are looking for Char- donnay from "certain parts of Sonoma and the Central Coast." Your lender of choice for agricultural capital • Agricultural real estate since 1917 • Long-term fixed or adjustable rate mortgage financing • Real estate secured revolving line of credit • Competitive interest rates • Flexible terms and structuring Rates are attractive —contact us today. www.metlife.com/ag 559.435.0206 Agricultural Finance © 2016 METLIFE, INC. darosa + associates planning + architecture since 1986 475 el camino real, # 308 millbrae, ca 94030 johnnydarosa@post.harvard.edu 650-692-4072 Es. annunci OF USA.indd 4 26/07/17 16:51