Ste. Michelle Flips Trend on Buyouts

Northwest company makes big play for premium Californian winery

by Andrew Adams
Patz Hall Sonoma House Ste. Michelle Wine Estates
The Patz & Hall tasting room, also known as The Sonoma House.

Sonoma, Calif.—A day after a large California winery announced its purchase of a premium Pinot Noir Winery in the Pacific Northwest, a large company from Washington state announced it had bought one of the best-known Pinot houses in California.

Ste. Michelle Wine Estates flipped the script on the recent trend of California companies making Northwest acquisitions by buying Patz & Hall Wine Co. in Sonoma. The companies announced their deal the day after Jackson Family Wines’ purchase of Penner-Ash winery in Newberg, Ore., went public. 

As the largest wine company in the Northwest and the seventh largest in the United States, Ste. Michelle already owns Stag’s Leap Wine Cellars in California’s Napa Valley and was looking for a Pinot Noir specialist to add to its line up of premium producers.

“Patz & Hall is the ideal addition to our ‘string of pearls’ collection of domestic and international wineries,” said Ted Baseler, Ste. Michelle’s president and CEO, in a news release announcing the acquisition.

Founded in 1988 by James Hall and Donald Patz, who met while both worked at Flora Springs Winery, Patz & Hall earned commercial success and high scores for its line of vineyard-designate Pinot Noir and Chardonnay wines from some of the best vineyards in the Russian River Valley, Carneros and Sonoma Coast appellations in California.

Ste. Michelle is buying the Patz & Hall brand, inventory, tasting room in Sonoma and an interest in the company’s winery (also located in Sonoma). Terms of the purchase were not made public. Patz & Hall currently produces more than 30,000 cases per year with an average bottle price of $55.

Patz & Hall will continue to source grapes from North Coast growers such as the Hyde Vineyard, Hudson Vineyard, Dutton Ranch, Chenoweth Ranch, Gap’s Crown Vineyard and Alder Springs Vineyard. “Our approach has always been to work with the very best vineyards to make wines that are benchmark expressions of their sites,” James Hall said in the announcement. “This will continue with Ste. Michelle. In fact, as part of finalizing the sale, we renewed our contracts with our best grower partners.”
All of the founding partners—who also include California sales director Anne Moses and VIP brand ambassador Heather Patz—will remain with the winery to provide expertise and ensure continuity with the winery’s operations. “While we had no intention of selling, we were actively planning for the future,” Donald Patz was quoted as saying, “the more we got to know the people of Ste. Michelle, the more impressed we were. They understand a winery like ours, and they know how to preserve what makes it special.”

The Patz & Hall deal follows a string of major purchases by California wineries in the Northwest. In addition to the April 18 announcement by Jackson Family Wines, the company also recently purchased a large property to serve as its headquarters in Oregon.

Santa Rosa, Calif.-based Zepponi & Co. brokered the Penner-Ash and Patz & Halls deals.

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