Trinchero Family Estates, the large Napa Valley-based wine company best-known for its Sutter Home White Zinfandel, has offered $16 million to purchase Folie à Deux Winery, located in St. Helena.
"We're negotiating right now some of the finer points. We made the offer and are doing our due diligence," said Bob Trinchero, chairman of the board at Trinchero Family Estates (TFE).
The deal would include the Folie à Deux brand, the winery and most of the inventory, as well as a 12-acre vineyard planted with Cabernet Sauvignon, located on the winery's property. Folie currently makes 30,000 cases per year, with prices ranging from $10 to $44 per bottle in retail shops.
Folie has two primary product lines. The more expensive Folie à Deux label focuses on Amador County Zinfandel and Napa Cabernet, as well as other varieties including Syrah, Chenin Blanc and Barbera. The winery also makes both a red and a white blend under the Menage à Trois label. The bottlings retail for $12 each. Winemaker Scott Harvey, who once owned Amador County Zinfandel specialist Renwood Winery, has overseen production at Folie à Deux since 1996.
A decision on the Trinchero offer should come Friday at the quarterly meeting of the Folie à Deux shareholders. In 1995, a private group led by current board chairman Richard Peterson purchased Folie à Deux out of bankruptcy. Peterson retains a 15 percent interest, making him the largest shareholder of a group of 60.
He remains undecided about the offer. "We're not telling anybody how we feel because I really don't know how I feel. If the majority votes to sell, then I'll probably vote to sell. And if they don't, I won't," Peterson said.
Although Sutter Home White Zinfandel comprises about 95 percent of the 10 million cases sold annually by Trinchero Family Estates, the company also owns other successful brands, including Montevina, which focuses on Amador County Zinfandel; Trinchero, which retails between $10 and $50 with Cabernet Sauvignon, Chardonnay, Merlot and Sauvignon Blanc bottlings in its lineup; and Reynolds in Australia, which was acquired in February.
Trinchero Family Estates currently owns 250 acres of vineyards in Napa. Bob Trinchero said the acquisition of Folie would strengthen his company's position in its home base.
"We want to expand our presence in Napa Valley, even though it's already substantial. We'd create a bigger presence and send a message, because two or three years ago there were rumors that we were for sale or looking to sell, and we're not," he explained.
If the negotiations go well, Trinchero hopes to conclude the deal by mid-May. "But it's not a slam dunk yet," Bob Trinchero said.
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