Columbia Winery in Woodinville has been sold along with sister winery Covey Run as part of an eight-winery, $209 million deal between Constellation...
Columbia Winery in Woodinville has been sold along with sister winery Covey Run as part of an eight-winery, $209 million deal between Constellation Brands and Ascentia Wine Estates, a newly formed private company based in California.
Columbia’s tasting room, on a month-to-month lease, will remain open in Woodinville at least through year’s end, said Jim DeBonis, chief executive of Ascentia.
He also said he doesn’t anticipate any significant changes to Columbia’s winemaking or wine lineup.
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“I plan on working with the team up here,” said DeBonis, who most recently was chief operating officer at Beam Wine Estates and previously managed Constellation’s Icon Estates. “It’s the folks working with the vineyards that provide a recipe for success.”
DeBonis explained that the deal had been in the works at least since January. He said a complicated series of wine-industry acquisitions led up to his decision to go after the eight brands that now comprise Ascentia’s portfolio.
Those other brands are: Geyser Peak, Buena Vista, Gary Farrell, Atlas Peak and XYZin in California; and Ste. Chapelle in Idaho.
The brands represented about 1 million cases of wine sold in 2007, according to Constellation. The company said in a statement that it is selling the holdings to reduce “brand duplication and excess production capacity.”
Constellation also owns Hogue Cellars, one of Washington’s largest wine producers.
“This transaction also provides cash to further reduce our borrowings and demonstrates our commitment to improve return on invested capital,” Rob Sands, Constellation’s chief executive officer, said.
The California brands had only recently been purchased by Constellation, while the Northwest wineries were acquired from Corus Brands in 2001.
“It was clear … I would have to figure out a way to make an acquisition of my own,” DeBonis explained.
DeBonis partnered with William and Peter Deutsch of wine importer W.J. Deutsch & Sons and GESD Capital Partners, a Bay Area private-equity food and beverage firm, to put the financing together.
W.J. Deutsch & Sons import such wildly successful brands as Australia’s [yellow tail] and France’s Georges Duboeuf.
Though he acknowledged his two decades in the wine business have been focused almost exclusively on California brands, DeBonis said he is eager to explore the potential of the Northwest wineries.
“The Northwest is a unique opportunity for me to expand our overall portfolio in order to have a greater regional focus,” he said. “I have a particular interest in the riesling category. … That was a real driving force in looking at Covey Run, Columbia and Ste. Chapelle.”
Columbia Winery was founded in 1962 by a group of University of Washington professors and originally known as Associated Vintners.
Under the guidance of David Lake, Columbia’s winemaker from 1979 to 2006, the winery pioneered the production of varietal wines, single-vineyard wines and the cultivation of grapes such as syrah, pinot gris and cabernet franc in Washington state.
The constant reshuffling of the enormous Constellation portfolio took its toll on Columbia in particular. In the past few years the winery had floundered, as Constellation changed winemakers and upended long-standing vineyard management practices.
Ascentia, DeBonis insisted, will change all that. “With this portfolio, every single one of them is of critical importance to us, and to our ability to succeed… They are going to get exactly what they deserve, which is the limelight.”
Although the terms of the sale include 646 acres of prime California vineyard land, no Washington vineyards are changing hands. Constellation Brands rose 37 cents, or 1.8 percent, to close Tuesday $21.14 a share. The shares have lost 11 percent this year.
Paul Gregutt is the author of “Washington Wines and Wineries The Essential Guide.” His column appears weekly in the Wine section. He can be reached by e-mail at email@example.com.