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Wine Spectator: Investment Group Buys Majority Ownership of Kosta Browne

January 6, 2015

Kosta Browne, maker of some of California’s most in-demand wines, has a new majority owner, replacing one equity firm with another. It’s a move that the founders and co-owners believe further strengthens their Sonoma winery and their plans to expand their mix of single-vineyard and appellation series Pinot Noirs.

The new partner is J.W. Childs Associates, a Boston-based private equity firm that focuses on investing in middle-market growth companies. It bought out Vincraft, which purchased a controlling interest in KB in 2009.

Terms were not disclosed, but the structure of the deal is similar to Kosta Browne’s first equity deal in 2009, which allowed some of the older investors to cash out of their investment, reportedly for close to $40 million. None of the parties involved in the new deal would talk numbers, but industry sources said the price tag is substantially more than what Vincraft paid five years ago.

Michael Browne, 46, Dan Kosta, 42, and Dan Costello, 39, who built Kosta Browne into one of California’s most successful brands in the past decade, still own 40 percent of the winery.

The deal amounts to an equity swap, Browne told Wine Spectator. Vincraft, owned by Bill Price, Walt Klenz, Pete Scott and Scott Gilbertson, realized its financial goals and wanted to sell their interest, he said.

Kosta Browne, which makes about 20,000 cases of Pinot and a smaller amount of Chardonnay, intends to increase production slightly. The winery sells most of its wine direct and has a waiting list that is thousands of names long, Browne said. Wine Spectator has the full story.

 

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