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Ascentia Looks To Reduce Its Debt With Sale Of Buena Vista And Gary Farrell

April 29, 2011

Boisset Family Estates and Vincraft have bolstered their presence in California’s premium wine trade thanks to yesterday’s deal with Ascentia Wine Estates—in which Boisset will acquire Buena Vista Carneros and Vincraft will buy Gary Farrell Winery.

Buena Vista Carneros, founded in 1857 is largely regarded as California’s oldest premium winery. Boisset is acquiring the property just weeks after Ascentia shifted production from the winery’s storied site to the Geyser Peak facility in order to streamline overall operations. With annual sales of around 35,000 cases, Buena Vista Carneros is best known for its Chardonnay and Pinot Noir, and its labels generally retail at around $15 a 750-ml.

Gary Farrell also is known primarily for Pinot Noir and Chardonnay. Vincraft is led by CEO Pete Scott, a former Foster’s executive. Vincraft adds the Gary Farrell brand and its Healdsburg winery to its growing stable of upscale, limited production wines, including the widely heralded Kosta Browne Winery. The Gary Farrell brand’s annual volume is 25,000 cases.

Ascentia is seeking to reduce the heavy debt that has plagued the company since its formation in 2008. Founded by wine industry veteran Jim DeBonis, Sonoma County-based Ascentia was initially backed by investors including California private equity funds GESD Capital Partners and Golden State Investment Fund, as well as WJ Deutsch & Sons, one of the leading U.S. wine marketers. Ascentia quickly made a splash when it purchased a series of wineries and brands from Constellation Brands, including California’s Geyser Peak, Atlas Peak, Buena Vista Carneros, Gary Farrell, XYZin, Washington’s Columbia Winery and Covey Run and Idaho’s Ste Chappell, for a total of $209 million in June 2008.

In its early days, Ascentia appeared to be an emerging force in the U.S. wine business, starting out with a portfolio of nearly 1 million cases and the support of the formidable WJ Deutsch & Sons sales force, which sells around 10 million cases of wine annually. But by 2010, the alliance between Ascentia and WJ Deustch had unraveled. They ended up in court and dissolved their partnership, prompting Ascentia to create an in-house sales force. In January 2011, Mike Kenton, a longtime wine industry executive, assumed Ascentia’s ceo post (as DeBonis was named vice chairman) and was charged with cutting the company’s debt. The Buena Vista and Gary Farrell sell-offs mark a significant step in that direction.

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