Deals

GI buys Napa Valley wineries

GI Partners purchased a controlling stake in St. Helena, California-based Duckhorn Wine Company, whose labels include Duckhorn, Paraduxx and Goldeneye. Wine industry sources estimate the price paid in the $250 million range.

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Transatlantic private equity firm GI Partners has made its first foray into the wine business, with a controlling investment in Duckhorn Wine Company that Napa Valley sources place at roughly $250 million (€181 million). The company’s labels include Duckhorn, Paraduxx, Goldeneye, Decoy and Migration.

Duckhorn: sold

The auction for the St. Helena, California-based wine company – which has three production facilities and several hundred acres of prime, planted vineyard land in Napa Valley and the Anderson Valley – lasted approximately six months, and included at least one group led by a local vintner who dropped out of the bidding at $220 million, a wine industry source said.

“With 80 investor families it seemed like a good time for us to look at how to monetize their position,” Margaret Duckhorn, the company’s co-founder and executive vice president of sales and marketing, told Wine Spectator last week.

Many of the shareholders who opted to sell had been investors in Duckhorn for 30 years, were aging and looking for liquidity, company president Alex Ryan told the wine-focused publication.

A spokesperson declined comment for GI, which last year closed its second fund on $1.45 billion.

Though GI invests regularly in retail – and particularly retail with a heavy real estate component, such as the UK pub portfolio of Spirit Group it purchased last year – this is its first venture into wine country.

Several Napa Valley insiders expect private investments to increase in mature, brand-heavy Napa Valley wineries as many founders struggle with succession issues, and the distribution and direct sales of California wines intensifies in the US’ booming wine market.