Ascentia Rumored To Be Exiting Business, Selling Geyser Peak, Washington BrandsJune 1, 2012
Shanken News Daily understands that Accolade Wines, the former Constellation Europe and Australia businesses now owned by CHAMP Private Equity, is preparing to purchase Ascentia Wine Estates’ core brand, Geyser Peak. Separately, Wine Industry Insight has reported that Ascentia is close to a deal to sell its Columbia and Covey Run brands in Washington state to E&J Gallo, and is set to exit the wine business. The Santa Rosa Press Democrat added that Ascentia CEO Jim DeBonis is drafting a statement to be released today or Monday.
The rumored deals follow a series of divestments for debt-laden Ascentia in recent months. It sold its Buena Vista Carneros and Gary Farrell brands last year (to Boisset Family Estates and Vincraft respectively), and earlier this month offloaded 130,000-case Idaho winery Ste. Chapelle to Precept Wine Group. Where Ascentia’s XYZin and Atlas Peak brands will land remained unknown at press time.
Geyser Peak has been the largest piece of Ascentia’s business. A premium California brand, it sells around 280,000 cases annually, down from a high-water mark of 305,000 cases in 2007, according to Impact Databank. Ascentia’s lead investor, GESD Capital Partners, didn’t return a request for comment on the rumored deals. E&J Gallo didn’t immediately respond to a request for comment on Columbia and Covey Run.
An Accolade Wines spokesperson would say only, “Accolade Wines is a global wine company with ambitions to develop our U.S. business. We have and will continue to consider opportunities to grow in the U.S., either organically or through acquisition, as they arise but will only make a public announcement once an actual transaction is concluded.”
Sonoma-based Ascentia was created in 2008 through the $209 million acquisition of a host of wine brands from Constellation by industry veteran Jim DeBonis and investors including GESD and W.J. Deutsch & Sons (the latter, now Deutsch Family Wine & Spirits, sued for a return of its funds in 2010, claiming Ascentia was insolvent and had inflated sales projections to lure its investment).
Accolade, which markets brands including Hardys, Banrock Station, Echo Falls, Leasingham and Tintarra, was formed in 2010 when CHAMP purchased 80% of Constellation Brands’ U.K. and Australia businesses in a deal worth $290 million. Last fall, Accolade appointed Tim Matz—formerly president of Fosters Wine Estates (Southcorp) in North America—as its North American managing director, and announced its intention to increase its presence in the U.S. A deal for Geyser Peak would mark a significant step in that direction.