TSG-Backed Duckhorn Wine Company Makes First Acquisition

August 17, 2017

Duckhorn Wine Company (DWC), a premier wine group backed by TSG Consumer Partners, announced it has made its first acquisition with the purchase of Calera Wine Company – a Central Coast California winery which was an early pioneer in popularizing  pinot noir.

Founded in 1975 by Josh Jensen, Calera is one of the most acclaimed wineries in North America and was pivotal in establishing the Central Coast as a respected wine producing region. The deal includes the Calera winery, brands, tasting room, and its Selleck, Jensen, Reed, Mills, Ryan, and de Villiers estate vineyards located in the Mt Harlan AVA totaling 85 planted acres between 2,200 and 2,500 feet above sea level.

Jensen will remain actively involved in the business once the transaction is complete and will claim a seat on the Duckhorn Wine Company Board of Directors and Calera will continue production of between 20,000 and 30,000 cases of wine per year.

“Like our own founders, Dan and Margaret Duckhorn, Josh is a visionary and pioneer who has spent more than four decades shaping the modern American palate for luxury wines,” said Alex Ryan, president and CEO of DWC. “What he has achieved at Calera has been nothing short of remarkable. Calera is one of the world’s great wineries, and we will ensure that Josh’s legacy of quality and excellence will continue to flourish for decades to come. For us, this is a fantastic opportunity to establish a presence on the Central Coast with one of the region’s most iconic wineries.”

Duckhorn

Calera is Duckhorn’s first acquisition and will be a valuable addition to its existing portfolio which includes six wineries totaling 600 acres of estate vineyards – Duckhorn Vineyards, Goldeneye, Paraduxx, Migration, Decoy, and Canvasback and includes the famous Three Palms Vineyard in Napa Valley, California.

San Francisco-based private equity firm TSG Consumer Partners announced its acquisition of DWC from GI Partners in August of last year for an undisclosed amount, however, industry rumors placed the deal at $600 million, according to the San Francisco Chronicle.

Founded in 1976 by Dan and Margaret Duckhorn, the company was acquired by GI Partners in 2007 as part of a deal that allowed its 80 investor families to monetize their positions and exit the company. In the ensuing years, GI partners invested $60 million to expand the company’s vineyard portfolio by 350 acres, to build and acquire state-of-the-art winemaking facilities, and to launch multiple new wines, according to Cheers Online.

Today, Duckhorn is one of the fastest growing wine companies in the U.S. market with combined sales of about 900,000 cases annually from its six brands. The company’s Decoy brand grew by 22.3 percent in 2015 to a distribution of 406,000 cases and is on pace to be one of the top 50 wine brands by retail sales value, while its Duckhorn brand saw growth of 18.8 percent last year according to Impact Databank, reports Shanken News Daily.

And while Duckhorn will benefit from adding one of North America’s top wineries to its portfolio, Calera will be able to leverage Duckhorn’s vast distribution network, its sales and marketing capacity, and its management team.

“Calera is my life’s work. In this era of industry consolidation, it was vital to me that I choose a partner that not only shares the values that have always defined Calera, but that also has the market presence to provide our wines a continued strong and secure route to market,” said Jensen. “Duckhorn is one of the most respected luxury wine companies in the world, and for good reason. They have integrity, and they are absolutely focused on making great wines. I’m proud to be entrusting Calera to their expert hands.”

And while Duckhorn’s president and CEO, Alex Ryan told the San Francisco Chronicle that the group had not been seeking out any acquisitions, he said, “…when we happened to come across an extraordinary brand, we had no choice but to consider it.”

-Lynda Kiernan

Lynda Kiernan is Editor with GAI Media and daily contributor to GAI News. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.com.

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