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Wine Investment Group Makes Big Moves in Pacific Northwest

Bacchus Capital Management buys Panther Creek and a stake in DeLille Cellars

Augustus Weed
Posted: May 15, 2013

Bacchus Capital Management, a private equity firm with six wineries and brands in Oregon and California, is placing a big bet on wine in the Pacific Northwest with two new deals. Wine Spectator has learned that the firm is buying Oregon's Panther Creek winery, hiring well-known winemaker Tony Rynders to head the cellars. The San Francisco-based firm is also buying a stake in DeLille Cellars, one of the first wineries to pioneer Bordeaux-style blends in Washington state.

Sam Bronfman, a former president of Seagram Chateau & Estate Wines, and investment bankers Peter Kaufman and Henry Owsley cofounded Bacchus in 2007, initially offering financing to West Coast wineries. When the opportunity to partner with winemaker Ed Sbragia arose in 2011, the company decided to take the plunge, opting to buy shares of his winery. The deal gave Sbragia the capital to build his business and gave Bacchus a stake in the profits. Since then Bacchus has also provided financing to Andretti Winery in Napa, Central Coast winery Qupé and bought a share of Maritime Wine Trading Collective, an importer and distributor.

Founded in 1992 by four partners, Greg Lill, Jay Soloff, Chris Upchurch and Charles Lill, DeLille quickly established a reputation for its Cabernet and Merlot-based blends. It also produces a range of Rhône-style blends under its Doyenne label. The winery has estate vineyards in Yakima Valley, with much of the fruit for its upper-tier wines coming from the Red Mountain appellation.

The deal includes the winery in Woodinville, as well as second label Doyenne. Neither side disclosed how big a stake Bacchus bought, but a spokeswoman said that the firm normally invests in the range of $2 million to $7 million. “They have never been static at DeLille for 20 years,” said Bronfman. “They have always been moving forward and we’ll continue to do that.”

The investment allows DeLille's team to track down additional sources of grapes. They have recently experienced supply issues and needed a partner to expand production. “The demand for our wine, and the potential for growing our brand is outstripping what we could do financially,” said Greg Lill.

Winemaker and co-owner Chris Upchurch plans to add several new wines to their portfolio. “This [deal] gives us the ability to do more with the grapes, which of course will give me more options on the blending table, more colors on the palate when I do the blending trials," said Upchurch. His plans include a Washington Malbec blend made in Argentine style and a Cabernet Sauvignon called Four Flags that will blend fruit from four of the winery’s Red Mountain vineyards.

In Oregon, Bacchus stepped outside its normal investment approach, purchasing Panther Creek Cellars outright from owner Liz Chambers and her family for an undisclosed sum. Winemaker Ken Wright founded Panther Creek in 1986, purchasing grapes from some of the Willamette Valley’s top vineyards and producing a range of single-vineyard Pinot Noirs. In the early 1990s, Wright launched Ken Wright Cellars and sold Panther Creek. The Chambers family bought it in 2005.

Liz Chambers told Wine Spectator she had not planned to sell, but other family members were ready to move on after her mother died in 2011. The deal includes the Panther Creek name and brand, but Chambers will retain the winery in McMinnville. She plans to launch a new label, Elizabeth Chambers Cellars, with Michael Stevenson, Panther Creek's current winemaker. Bacchus will lease the visitors center and tasting room and is looking for a new winemaking facility.

As part of the deal, Bacchus has hired Rynders to take over as consulting winemaker. Rynders was formerly winemaker at Domaine Serene, where he produced some of Oregon’s highest-rated Pinot Noirs and Chardonnays. In 2008 he left to pursue his own consulting business, and now makes wines for five different clients, producing around 14,000 cases a year. He also started his own Pinot Noir label in 2008 called Tendril.

Rynders involvement was integral to Bacchus’ decision to buy Panther Creek. Managing partner Peter Kaufman said the company was intrigued by the winery’s storied past but wanted to refocus the brand. “We thought it needed an iconic winemaker to really make it hum to go forward,” said Kaufman.

Photograph Courtesy of Bacchus Capital

DeLille Cellars has made a name in Washington reds from its winery in Woodinville.

The winery will continue to make single-vineyard Pinot Noirs as well as a Chardonnay. “The focus is going to be first and foremost on the quality of the wines; growth is a secondary thought here,” Rynders said. “I’ve embraced a wine style, really trying to accentuate the very strong sense of place that we have here.”

The team hopes to utilize many of the same vineyards Panther Creek worked with in the past. “We are reviving many of those relationships and also starting new relationships,” said Anthony Van Nice, an Oregon industry veteran Bacchus is appointing as president of the winery.

Panther Creek and DeLille are the latest in a series of deals that Bacchus has made this year. In February the company made a followup investment in Wine By Joe, one of the largest producers in Oregon, which makes brands such as Dobbes Family Estate and Jovino. In April it partnered with Madrigal Family Winery in Napa Valley, a 6,000-case winery that focuses on Cabernet Sauvignon, Zinfandel and Petite Sirah.

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