Hardy-Constellation Venture Buys California's Blackstone Winery for $140 Million
Pacific Wine Partners, the recently formed joint venture between Australia's BRL Hardy and New York—based Constellation Brands, has agreed to purchase Blackstone Winery in California for $140 million. The deal for the 500,000-case, mid-priced brand is expected to close later this month.
"Blackstone will nearly double our company's sales volume," said José Fernandez, CEO and president of Pacific Wine Partners, which began operation in August.
Constellation and Hardy created Pacific Wine Partners to produce and market Australian-style wines in the United States, with a focus on bottlings in the $8 to $12 range. The company started with about 700,000 cases in annual sales, including Constellation's Farallon brand from California. It is also the exclusive U.S. importer for seven Hardy brands: Australia's Banrock Station, Hardys, Leasingham, Barossa Valley Estate and Chateau Reynella; Nobilo of New Zealand; and La Baume of France. The venture's initial plans called for increasing yearly production to 5 million cases within a decade through acquisitions, new brands and expansion of current brands.
Blackstone, which was founded in 1990, currently produces 500,000 cases of wine per year, with most selling for $10 to $14 a bottle. Based in Graton, in Sonoma County's Russian River Valley, it is best known for its California Merlot, which is popular on restaurant by-the-glass lists, and also makes Napa Valley Merlot, Monterey County Chardonnay and California Cabernet Sauvignon.
Stephen Millar, managing director of BRL Hardy, said in a corporate statement that the companies decided to purchase Blackstone because it would "provide Pacific Wine Partners with a fast-growing U.S. wine brand and significantly increase the critical mass of the existing portfolio of Pacific Wine Partners."
Blackstone's founders, brothers Derek and Courtney Benham, will retain the Martin Ray and Mark West brands, while Blackstone winemaker Dennis Hill will stay on in his role, joining the Pacific Wine Partners staff.
Despite recent downturns in the global economy, Pacific Wine Partners plans to continue investing in the American wine industry because it considers the market to have considerable room for growth. But Millar downplayed the possibility of further purchases. "We will not say we won't make other acquisitions, but it is not high on the agenda," he noted.
Check our recent ratings of Blackstone wines.
Read more about Pacific Wine Partners:
Australia's BRL Hardy Forms $100 Million Joint Venture With U.S. Wine Giant
Read more about Constellation's recent acquisitions:
After the Sale: The Future of Sonoma County's Ravenswood
Canandaigua Swallows Washington-Based Wine Group
Sebastiani Brands Sold to Canandaigua Wine for $295 Million
Canandaigua Buys Franciscan Estates in Blockbuster Deal
LVMH Sells Simi to Canandaigua for $55 Million