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By Matt Andrejczak, MarketWatch
SAN FRANCISCO (MarketWatch) — For visitors to California wine country, Chalk Hill Estates would be a dream property to own if you just happened to have the tens of millions of dollars in your bank account to even consider buying it.
Chalk Hill, outside the town of Windsor in Sonoma County, is a 1,400-acre estate sitting in its own namesake wine appellation. About 350 acres are planted to Cabernet Sauvignon, Merlot, Chardonnay and several other varietals. There is a mansion to live in, guest houses in which to put up your friends, a few lakes and an equestrian center with nearby horse stables. There is also a tiny chapel to get married in. And atop the vineyard hills — sweeping postcard views that extend for miles.
Bill Foley.
But for someone by the name of William P. Foley II, who goes by Bill, a trophy property like Chalk Hill just isn’t enough. The thing is, Foley — who amassed his fortune in title insurance and fast-food hamburgers — has an itch for acquisitions, and a long history of making them work.
Foley, founder and current chairman of Fidelity National Financial Inc.
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, is a serial dealmaker and wine is the latest target for the former West Point cadet.
“I want to bring financial discipline to the wine industry,” Foley said during an interview at his office at Chalk Hill, the new headquarters of Foley Family Wines.
Foley, 65, has easily spent more than $175 million during the Great Recession to snap up wineries, labels and vineyards in California, Washington State and New Zealand.
His bigger catches include Sonoma’s historic Sebastiani Winery — one of California’s oldest producers; Firestone Vineyard, a Santa Barbara County pioneer, and Merus, a pricey cult Cabernet made in a Napa garage until Foley acquired it. Lately, he’s been sniffing around the Willamette Valley’s prized Pinot Noir country not far from Portland.
“Oregon is a must. I want a brand with cachet,” Foley says.
In March, he reportedly lost out on a bid to acquire Fetzer Vineyards in California’s Mendocino County. It was sold to Chile’s Vina Concha y Toro for $238 million by Jack Daniels maker Brown-Forman
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Foley recently entered a deal to buy cash-strapped New Zealand Pinot maker Te Kairanga. Other investments of late include non-controlling stakes in Australian value-wine maker, Wineinc, and Crushpad, a custom wine-making service that will use extra space at Sebastiani.
So what else is on his buy-wish list?
In Napa, he’d like a winery near St. Helena or Rutherford and a boutique hotel (he already owns Hotel Les Mars in the Sonoma County town of Healdsburg). He’s not planning on doing another deal in Washington State.
Big splash
Foley’s come a long way. In 2006, he was just another number among the some 3,000 wineries in California. He owned the Foley and Lincourt wineries in Santa Barbara County where the Pinot-inspired movie “Sideways” was filmed. His production was 30,000 cases a year — not exactly tiny but not enough to make a wine distributor take notice.
“We were sort of irrelevant,” Foley says. Not so much anymore.
After his four-year acquisition binge, Foley Family Wines now houses nine wineries and 30 labels. Production for 2011 is estimated at 900,000 cases, up 12% from 2010. Foley hopes to make a modest profit of $1 million.
“It’s been stunning to see what he’s done and the impact he’s had in such a short period of time,” said Santa Rosa, Calif.-based wine banker Mario Zepponi, who represented Chalk Hill Estate and Napa-based Kuleto in their sales to Foley. “His wine empire is becoming relevant. He still has a ways to go, but he’s getting distributor’s attention.”
While he waits for the next big deal, Foley — Wine Enthusiast magazine’s Man of the Year in 2010 — is finishing centralizing the financial and marketing operations of all his acquired wineries. This will be key to ensuring he can make a sustained profit in the future.
New man on the block
“Did they sell you any wine?” Foley asks walking back to his office adjacent to Chalk Hill’s tasting room.
He looks at ease in his faded blue jeans, dark sweater and loafers. He knows down to the bottle how much Chalk Hill Founders Block Chardonnay is left. There are 210 bottles. It’s his current favorite.
Foley is starting to settle in at Chalk Hill. He’s getting the estate house refurbished to he and his wife Carol’s liking. For the meantime, he’s living just up the road at Chateau Felice, a neighboring winery he snapped up last October and where he plans to host wine buyers.
He’s already done some entertaining. Some New York bankers this year stayed at Chalk Hill and plunked down $37,000 on the Merus Cabs.
There’s no doubt Foley’s raised eyebrows up here in northern California, where Napa and Sonoma are considered the creme de la creme of American wine country, drawing millions of wine-sipping visitors a year. With his big bank account, it seems as if nothing is quite out of his reach.
“Bill is still looked upon as a newcomer to the wine industry,” said Zepponi.
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Article source: http://www.marketwatch.com/story/wine-sellers-find-thirsty-buyer-in-bill-foley-2011-05-20?link=kiosk
