Luxury wine brand Crimson Wine Group has recently acquired an historic Sonoma winery, Seghesio Family Vineyards. The winery is one of the oldest family-owned California wineries, established in 1895, and is famous for its California Zinfandel.

Although specific terms of the acquisition have not been disclosed to the public, it is reported that the winery was purchased for a price between $90 million and $120 million. The purchase includes 300 acres of vineyards and the Seghesio brand, along with the winery’s current wine inventory.

This was quite a turnaround for the Seghesio family. Only a decade ago, the vineyard was not considered to have much value and was producing only less-expensive table wines. In fact, in 1995, the winery received a $4 million bill from the IRS for back taxes. In the past ten years, however, younger family members took over, turned the winery around and began producing a more upscale product, which appears to have resulted in this acquisition.

Acquisitions of family-run businesses are part of a growing trend in California. Although the Seghesio family made it though Prohibition, the Great Depression, drought, floods and a fire, the tax problem, along with issues such as global competition in the wine market and increased consolidation of distribution channels were enough to convince the family to sell. In addition, the Seghesio family has grown so large that inheritance tax and estate succession rules have become burdensome.

As part of the deal, members of the Seghesio family who were closely involved with the winery will remain involved with management of the Sonoma estate, including in the roles of winegrower and winemaker.

Crimson owns a number of high-end wine brands and vineyards in California. Just prior to this acquisition, Crimson acquired Chamisal Vineyards in California’s Edna Valley and Pine Ridge Vineyards in Napa Valley.

Source: Wine Spectator, “Exclusive, Seghesio Family Sells Historic Winery,” Tim Fish, 31 May 2011