Tobacco company finally divests Chateau Ste. Michelle Wine Estates

 

It’s long been a head scratcher in the wine business why Altria/U.S. Tobacco — a company that sells inherently deadly consumer products — would own Chateau Ste. Michelle Wine Estates —  a company that, according to the preponderance of medical research —  makes an inherently healthy product when used as recommended.

 

Today, Altria issued a news release stating that it has agreed to sell its Ste. Michelle Wine Estates business to New York-based private equity firm Sycamore Partners Management, L.P., for approximately $1.2 billion and the assumption of unspecified Ste. Michelle liabilities.

 

According to the Altria news release, the sale will allow the tobacco giant to focus more on vaping and other “non-combustible” nicotine delivery systems:

“We believe the Transaction is an important step in Altria’s value creation for shareholders and allows our management team greater focus on the pursuit of our Vision to responsibly transition adult smokers to a non-combustible future,” said Billy Gifford, Altria’s Chief Executive Officer.

According to a quote furnished by Altria in its news release, David Dearie, President & CEO of Ste. Michelle Wine Estates, said:

“The Ste. Michelle leadership team and I look forward to working with the team at Sycamore Partners and believe we are well-positioned to help drive the next phase of growth. Their commitment to partnering with us is a tremendous vote of confidence in the team and our magnificent estates and brands.”

“Ste. Michelle is committed to leading the growth of the Washington wine category through investment in brand-building and by continuing to craft award-winning, wonderfully drinking wines. We are fortunate to have renowned estates and brands in Oregon, Napa, and Sonoma to complement our diverse portfolio in Washington.”

Sycamore Partners

According to the Sycamore partners web site:

“Sycamore Partners is a private equity firm based in New York. The firm specializes in consumer, distribution and retail-related investments and partners with management teams to improve the operating profitability and strategic value of their business.

With approximately $10 billion in aggregate committed capital raised since its inception in 2011, Sycamore Partners’ investors include leading endowments, financial institutions, family offices, pension plans and sovereign wealth funds. has investments worth approximately $10 billion.”

According to Sycamore Partners’ Wikipedia listing:

“Sycamore Partners was founded in 2011 by Stefan Kaluzny and Peter Morrow. Before Sycamore, Kaluzny was a Managing Partner at Golden Gate Capital and was employed since the firm’s inception. Prior to joining Golden Gate, he co-founded Delray Farms, Inc. and also served as its Chief Executive Officer. Kaluzny received a BA from Yale University and an MBA from Harvard Business School. Morrow served as a Principal at Golden Gate before co-founding Sycamore. Peter Morrow received a BA from Stanford University and an MBA from Stanford Graduate School of Business.”