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Sonoma Icon Sebastiani Sold for Rumored $47 Million

Photo by: Greg Gorman

Posted: Dec 20, 2008 4:51pm ET

The Foley Wine Group has purchased Sebastiani Vineyards, one of the cornerstones of the Sonoma County wine industry for the past century, owner William Foley told Wine Spectator.

The family-owned winery, founded in Sonoma in 1904, had been trying to sell its business in recent months, according to Mary Ann Sebastiani Cuneo, one of the principal owners. But at least two potential sales deals fell through, she said.

While terms of the sale to Foley were not disclosed by Cuneo, one source familiar with the sale said the price was in the $47 million range. Revenues last year were said to be $33 million. The purchase includes the production facility and tasting room in downtown Sonoma, which last year hosted 250,000 visitors, along with several vineyards and the winery’s inventory. Cuneo and her two brothers, Sam Sebastiani and Don Sebastiani, have owned the winery since their mother, Sylvia, died in 2003. Cuneo declined to say why the family had decided to sell.

“I’m pretty excited,” Foley said. The 280,000-case winery, which makes five lines of Sonoma County wines, “gives me the volume to have some clout with distributors and to do the little brands.” He said he plans to bring new resources to the Sebastiani line of wines, which have consistently been rated in the very good to outstanding range in Wine Spectator ratings.

The “little” brands include several wineries owned by Foley, including Merus, the Cabernet specialist in Napa Valley, purchased last December, along with Venge Vineyards, bought earlier this year.

Foley is chairman of the Florida-based Fidelity National Financial Inc., which last year had gross revenues of $5.5 billion, putting it at No. 435 on the Fortune 500 ranking of the largest U.S. companies. In February 2008 he acquired a 60 percent share of Three Rivers Winery, in the Walla Walla region of Washington state. The previous August he bought Firestone Vineyards in Santa Barbara, where he already owns Foley Estate and Lincourt. He owns eight brands and 1,100 acres vineyards in California and Washington state, with an eye to further expanding his holdings.

In many ways Sebastiani represents the historical arc of winemaking in Sonoma County: poor Italian farmers scraped and toiled to build small empires on sturdy, inexpensive wines, and as the California wine industry evolved and matured, new generations took over and they evolved and matured as well, leaving behind the jugs and producing increasingly more impressive wines.

Samuele Sebastiani was the founder of the winery, which for much of the past century was the most prominent producer in the county and one of the largest in the state. Samuele’s son August, a man with an affinity for bib overalls and stout, simple wines, built the winery’s reputation on inexpensive jug wines. He died in 1980 and his wife Sylvia took the helm and put their son Sam in charge. But after his efforts to reposition and upscale the brand faltered, he was fired and replaced by his brother Don. Don refocused the company on volume and it became more profitable. The winery then sold several of its value brands, including Vendange, Talus, Nathanson Creek, La Terre, Heritage and Farallon.

Pete Seghesio, CEO of Seghesio Vineyards, which is also a century-old Sonoma winemaking family, said “This is very reflective of what has happened to our industry. It’s sad to have such a historic landmark winery change hands. Their family history is a great picture book of the American wine industry.”

Scott Callais
Baton Rouge, LA —  December 21, 2008 12:21am ET
It's a pretty sad day for me. Just as sad as the day Robert Mondavi Winery was sold. I was just at the winery a month ago and stayed at the Cherryblock Cottage. I've been in the business for thirty years now. The family wineries is falling to the wasteside and being gobbled up just like what happened to the local family wholesalers. The business is getting very dispationate. And when that happens the wines get impersonal too.
Ben Brady
Des Moines, Iowa —  December 21, 2008 10:10am ET
So is anyone from the family staying on?
Lee Hammack
Virginia —  December 21, 2008 10:12am ET
It IS a shame. But there are so many pressures on a family-owned business (of any sort) that maintaining the connection is often impossible. Even if the next generation gets along well and WANTS to stay in the game, things like inheritance laws (taxes) may stand in the way.
Dennis D Bishop
Shelby Twp., MI, USA —  December 21, 2008 11:32am ET
It is hard for families to pass up the big bucks that are offered for their properties. Although I am sure that the sale was a value deal for Foley due to the recent credit crisis and the devaluation of property. I agree, this is evolution - some of these changes will not work out, others may actually improve the industry and the product. Over the next 5 to 10 years it will be at the very least interesting to behold.
David Peters
Mission Viejo, CA —  December 21, 2008 6:37pm ET
Having a passionate love for history, tradition, and and old-world architecture I am deeply saddened by the sale of the Sebastiani winery complex. I have been visiting the winery since the late sixties and each time I truly felt the presence of Samuele and August Sebastiani among those hallowed walls and the barrels with hand-carved motifs. I believe their spirits will linger there long after the property changes hands. Therefore, tonight I will lift a glass of their 1974 Cabernet Special Selection from my cellar. I am down to only 2 old bottles from the 60's and 70's........the other is a Sebastiani '68 Cab Reserve which I may just have put in my 'box' when they lower me into the ground !!!!!!!!As August would say......CIAO !!!!
Apj Powers
Dallas, TX —  December 21, 2008 8:32pm ET
It does seem like most of the pioneering families in Sonoma/Napa are changing hands. Scott we stayed at the Cherryblock Cottage early this yr too! I liked that Sebastiani sold off many of those value brands and contracted the business a bit to focus on quality. JL when will the deal actually be final? (re: the Montelena sale).
James Lewis
Castle Rock, CO —  December 21, 2008 10:58pm ET
For all that are saddened by this development, please keep in mind that Foley is a family man himself. It's not as if the future of the Sebastiani name is going to be determined by some giant spirits conglomerate. Foley has steered Firestone in a better direction and will do the same for Sebastiani. It's a private, family-owned venture, not a publicly traded entity, and he's more concerned with the quality and image of the product than just generating quarterly numbers to please Wall Street.
Scott Callais
Baton Rouge, LA —  December 22, 2008 1:27am ET
We'll see if what James says happens. All I'm saying is that it's not personal anymore and that the family wineries that those of us who have cherished for so long, through thick and thin, are leaving us. That extra touch will be gone. These family wineries will just be part of a portfolio where the large national distributors will try and sell a certain product when the quotas need to be met. I'm sorry, but this may closely be the end of a great era when the wineries, distributors, and retail and restaurant personnel loose that special fellowship. At the same time, I will continue to pour the Sebastiani wines as long as quality and value is is the main focus.
Larry Schaffer
central coast, ca —  December 22, 2008 11:05am ET
I agree that it is sad when family businesses are purchased by 'outsiders' . . . it will never be the same . . .

That said, it's difficult to say that it won't be better' at this point. It sounds as if there was a bit of internal family strife and it might have been better to sell than to watch the winery potentially spiral downwards . . .

As others have pointed out, Foley has had a positive result with the wineries he's purchased thus far, and there really is no reason to believe that he won't be able to achieve 'success' with Sebastiani again. I'm certain he'll allow the name to remain and will most likely try to get at least 'figurehead' appearances from the namesakes themselves . . .

You also have to remember that Foley is trying to build national presence, and he's quickly achieving this - much faster than he ever could have had he started from scratch . . . These are not 'the old days' - this is modern empire building . . .

Cheers!
Skip Taylor
Nashville, TN —  December 22, 2008 1:26pm ET
My wife and I have been drinking Sebastiani for years as our house wine. We visited there just last year and am so glad now that we did while it was still in the family. I don't know how this is going to turn out but tonight we will be remembering their great history and all their great wine we've drank while toasting Samuele and August with a bottle of Sebastiani Sonoma Valley Cab.
Richard Scholtz
Austin, TX —  December 22, 2008 5:09pm ET
We visited the winery and tasting room on our honeymoon in 2007. We enjoyed the wines so much we became a member of their wine club on the spot. While seeing the winery being sold is certainly sad, I'm hoping Foley can make the wines even better than they are now. I'm hoping the same service and wines that I get through the wine club will continue. I'll open a bottle of the Secolo tonight in honor of the family.
Michael Tracy
Corona, CA —  December 22, 2008 5:53pm ET
I cut my teeth and built my cellar upon Sebastiani wines. The old Sonoma Cask Cabernets from the 1990's and in particular the 1997. Cherryblock, a great, great CS that rivals anything from Napa IMHO, the amazing Barbera that only Sebastiani seems able to make, the Alex cab, and Adagio, their fortified wine which I love.I love the historic town of Sonoma, and the Sebastiani lore, their dogs sleeping on the porch of the cellar door and the sense of old California in the air. When I visit there, it seems the pace never quickens.
John Jorgenson
Seattle, —  December 24, 2008 6:46pm ET
Merry Christmas . . . Happy Holidays . . .and Best wishes for a prosperous New Year. Your readers appreciate you and the work you do. Keep it up this coming year and know your work is blessing us and we thank you from our hearts. Tell Tim we appreciate him too.
Alfred W Cronin Jr
Southeast-Massachusetts —  December 30, 2008 7:17pm ET
This is no shock, given the changes I have seen and experienced in the past 10 years.I was an outside salesman for 40 yrs. I represented Seagrams--Allied Domq.-Rbt Mondavi etc. etc. etc. I was at Sebastiani in May for the first time and we loved it all.And Mr. Foley I have sold and enjoyed your wines as well.I know great care will be taken to maintain and then improve on the solid base that is Sebastiani. We will be there in October. I hope they don't do anything different--especially (for my wife) that great gift shop.
Peter Hucal
Victoria, BC —  December 31, 2008 4:08pm ET
A bit of a side story. Two week ago I had a vertical tasting with friends of Sebastiani Cabernet Sauvignon Sonoma County from vintages 2001-2005. My friends do not have much wine knowledge so I had set out a table of the scores and write-ups from each vintage from WS but left the vintage spot blank for them to fill in. The 2001 and 2002 were in good shape but the 2001 was just starting to fade but was still good. The 2002 is still drinking nicely with at least a good year before decline. The fun part was seeing how my friends judged the wines as per your description and ratings. Most people got 3 out of 5 correct. The interesting part was that everyone agreed that the descriptions and scores were accurate. This is confirmation of your scoring and keep up the good work. Happy New Year.

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