Duckhorn Wine Company

The Duckhorn estate house.

The same company that invested in vitaminwater, popchips, Muscle Milk and Smashbox Cosmetics is the new owner of the Napa Valley’s Duckhorn Wine Co.

Duckhorn Wine Co. and TSG Consumer Partners, a San Francisco-based strategic equity investor in consumer brands, announced Monday that TSG will acquire Duckhorn Wine Co. from its most recent owner, GI Partners.

Financial terms of the transaction were not disclosed. However, in 2007, GI was reported to have paid about $250 million for the company. On Monday, one wine industry expert estimated the sale at more than $600 million.

Barbara Insel, president and CEO of Stonebridge Research Group, wasn’t completely surprised by the sale.

In the past, she had heard rumors that Constellation Brands was going to buy Duckhorn Wine Co.

In that case, sales, marketing and finance operations would have likely been consolidated within Constellation, she noted. With the sale to TSG, it’s more likely that Duckhorn will maintain its distinctive identity, she said.

“They seem to have found an interesting firm that has a lot of strong consumer brands,” Insel said. “They found people who understand high-end consumer and food brands.”

“Some that have put their money in wine don’t really understand what wine is,” said Insel. “They should be understanding owners, who will try and build the group.”

She said a “guesstimate” for a sale price would be more than $600 million, “which is a breathtaking number. It is kind of amazing.”

“We look forward to working with TSG,” said Duckhorn Wine Co. President and CEO Alex Ryan.

“We are thrilled by this incredible opportunity to partner with and invest in Duckhorn,” wrote Jamie O’Hara, TSG president.

The transaction includes all six Duckhorn Wine Co. wineries: Duckhorn Vineyards, Goldeneye, Paraduxx, Migration, Decoy and Canvasback and corresponding properties, along with more than 600 acres of estate vineyards, including the “legendary” Three Palms Vineyard in Napa Valley.

All employees are being retained, including the winemakers for all six wineries, and the company will continue to be guided by CEO Ryan, who has been with DWC since 1988. Dan and Margaret Duckhorn, the Duckhorn founders, will also remain involved.

“TSG recognizes and values how unique we are in the North American wine industry and is committed to preserving the strong culture that defines us,” Ryan said in a statement.

“By combining their consumer expertise and global reach with our luxury wine market proficiency and focus on quality, we can ensure that our next 40 years will be as exceptional as our first four decades.”

O’Hara described Duckhorn Wine Co. as “one of the most respected wine portfolios in the world.”

“Our goal is to support the company’s vision and to use our consumer expertise to bring the Duckhorn portfolio of wines to an even broader global audience,” said O’Hara.

In 1978, Dan and Margaret Duckhorn “changed the face of the U.S. wine industry” when they made 800 cases each of their inaugural Napa Valley cabernet sauvignon and merlot.

Beginning in the late 1980s, the Duckhorns began leading Duckhorn Vineyards through a period of growth, expanding its estate program and diversifying its parent company, Duckhorn Wine Co.

When Duckhorn Wine Co. was sold to GI Partners of San Francisco in 2007, the Duckhorns stayed on, and worked closely with Ryan to write the next chapter of the winery.

While many wineries consolidated production and sold assets during the Great Recession, GI Partners invested more than $60 million in the company’s future.

It expanded its estate vineyard portfolio by 350 vine acres, built and acquired state-of-the-art winemaking facilities and unveiled several new wines.

The company just had its most profitable fiscal year to date, said the release.

As far as what this sale means for the Napa County wine industry, Insole said, “Strong brands are getting stronger, especially if well-managed. If you build a strong brand with reasonable scale, you have a very strong position in the industry. There aren’t many of them, though.”

People think “I’m going to get rich starting a little winery,” Insole said. “It definitely doesn’t work like that.”

Since its founding in 1987, TSG has been an active investor in the food, beverage, beauty, personal care, household and apparel & accessories, and e-commerce sectors. Representative past and present partner companies include vitaminwater, thinkThin, popchips, Muscle Milk, Stumptown, Pabst, Planet Fitness, REVOLVE, PAIGE, Smashbox Cosmetics, Pureology, Sexy Hair, e.l.f. cosmetics and IT Cosmetics.

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Business Editor

Jennifer Huffman is the business editor and a general assignment reporter for the Napa Valley Register. I cover a wide variety of topics for the newspaper. I've been with the Register since 2005.