Aiming to become an even bigger player in the California wine business, Joe Wagner has agreed to sell his Meiomi brand to Constellation Brands for $315 million. The 33-year-old Wagner told Shanken News Daily that he’s selling Meiomi—one of the U.S. wine market’s hottest brands—because the deal will give him the liquidity necessary to become a much larger landowner. Wagner says he hopes to amass 2,000-3,000 acres of California vineyards over the next five years.
Constellation is paying a hefty price for Meiomi. Wagner told SND, a sister publication of Wine Spectator, that the deal price was roughly a 24 times multiple against the brand’s present and future earnings.
In striking the deal, Constellation adds a brand whose recent performance has been nothing short of astonishing. Wagner developed Meiomi in 2006 while he was a winemaker at Caymus, which is headed by his father, Chuck, and the wine was released in 2009. In 2010, the brand sold 90,000 cases. Last year, the California wine brand won Impact “Hot Brand” honors after advancing by 41 percent to 550,000 cases and was named Wine Brand Of The Year by Impact sister publication Market Watch magazine. Wagner told SND that Meiomi, which retails for around $25 a 750-ml., is on pace to sell more than 700,000 cases in 2015.
The transaction includes no vineyards. Constellation will begin making Meiomi at several of its production facilities around California, according to Wagner. Wagner has agreed to act as a consulting winemaker for Constellation for a two-year period.
Wagner and Constellation were in talks for about a year. According to Wagner, Constellation initially insisted on a restrictive non-compete clause. But by the time the two parties agreed to the deal, that clause had been lifted, giving Wagner the option to develop a new Pinot Noir at a price point similar to Meiomi’s.
While Meiomi is best known for its Pinot Noir, Wagner introduced a Chardonnay in 2014. Last year he also formed Copper Cane Wine & Provisions to handle Meiomi and several other wine brands. The establishment of Copper Cane represented a break from Wagner Family of Wines, led by Joe’s father, Chuck Wagner.
“Meiomi’s numbers alone equal the entire production of Wagner Family of Wine,” Chuck Wagner recently told SND, adding “The entire family loves what Joey’s doing. He’s created his own style of Pinot Noir that has scored well with critics, and I’m proud of him for it.”
The Meiomi purchase, which is subject to regulatory approval, is expected to close in early August.