After its earlier deal with The Wine Group fell through in December, Sebastiani Vineyards in Sonoma, Calif., agreed on Thursday to sell its bulk-wine operation to Constellation Brands for about $295 million. Included in the deal are six brands that totaled 7.6 million cases in sales last year, as well as two wineries in California's Central Valley.
Constellation's Canandaigua Wine Company, based in Fairport, N.Y., is purchasing Turner Road Vintners and Humphrey & Brown International Wine Marketers, the production and marketing divisions of Sebastiani's bulk-wine business. Brands included in the transaction are Vendange, Talus, Nathanson Creek, La Terre, Heritage and Farallon, which had combined earnings of $33 million on $204 million in sales last year.
The sale will allow Sebastiani to concentrate on its line of high-end Sonoma County wines, which retail for between $15 and $75 per bottle. "Our goals are to focus on the premium winery and return to our roots -- which is Sebastiani -- and make the best wines we possibly can by working on small lots and focusing on the details," said Mary Ann Cuneo, senior vice president at the company.
Sources indicate that Cuneo is tentatively slated to become CEO of Sebastiani. She will replace her brother Don Sebastiani, who will focus upon Cecchetti Sebastiani, a Napa Valley-based partnership with brother-in-law Roy Cecchetti. (Their brother Sam Sebastiani continues to head Viansa Winery in Carneros.)
Last August, Constellation sought to purchase Sebastiani's bulk-wine business, but was outbid by the San Francisco-based Wine Group, producer of the Franzia boxed wines and Corbett Canyon and Foxhorn brands. The sale was not completed, however, because The Wine Group decided that the Sebastiani brands did not complement its current portfolio, sources said.
Canandaigua Wine Company's portfolio includes brands such as Almaden, Arbor Mist, Cook's sparkling wine, Dunnewood, Paul Masson and Mystic Cliffs. Jon Moramarco, president of Canandaigua Wine, said, "The acquisition of the Turner Road Vintners' brands is very strategic, adding seven million cases a year to our sales and filling a gap in our portfolio with well-known brands in the $4 to $10 range."
Read related news stories:
Sips & Tips | Wine & Healthy Living
Video Theater | Collecting & Auctions