“METIS was recommended to me for selling my winery and vineyard. I’m glad they were. They found us a great buyer and got us a great price. They marketed the property well, but it was their help through the diligence process that was invaluable. I live in Arizona, and having someone with feet on the ground that understands vineyards and winery facilities was priceless. They made the process smooth and timely.”
Jim O'Connell, Founder of Tertulia Cellars
Tertulia Cellars was founded in 2005 as an Estate Grown winery in Walla Walla’s Southside district. The property is comprised of a 14 acre parcel that includes a 9,200 square foot winery and tasting room building, with 7.18 producing acres called the Whistling Hills Vineyard. Founded by Jim O’Connell, a successful hotel and commercial real estate developer with properties located throughout the western part of the United States, Tertulia is located in the heart of the Walla Walla Valley AVA, where over 500,000 visitors per year come to taste wine and visit wineries.
Though Tertulia Cellars grew to a successful wine brand, Jim decided in 2021 it was time for him to exit the wine business and focus more on his hotel developments. As such, Jim made the decision to publicly wind-down the Tertulia Cellars brand prior to the 2021 harvest, and contacted METIS to explore the process of selling the facility, equipment, and adjacent vineyard.
The challenge was finding a buyer who was looking for a fully equipped, turn-key winery and tasting room, but without the brand an inventory of Tertulia Cellars. Equally challenging was finding a buyer who would be able include the fruit from the vineyard into their portfolio and business plan and to conclude a sale in time to prepare for the 2022 harvest.
Through its extensive knowledge of the Pacific Northwest wine industry, METIS knew there were varying buyer types that could unlock the intrinsic economic value of these unique assets. The team at METIS got to work on a discrete, multi-prong marketing effort and approached these varying entities resulting in many interested parties and multiple facility tours. This included several incumbent Washington wineries looking to expand their existing brand into Walla Walla’s strong direct-to-consumer marketplace, national and international wine businesses looking for a toe-holding into the Washington market, and vineyard companies looking to expand into winemaking operations.
One such party METIS approached was Patterson Cellars, a Woodinville, WA winery who was looking to expand their production operations while establishing a strong direct-to-consumer presence in Walla Walla. Under a non-disclosure agreement, METIS discretely approached John Patterson, owner of Patterson Cellars, about the Tertulia opportunity. John was so intrigued, he got in his car and drove to Walla Walla the next day to meet with the METIS team and tour the property. After the tour, John was able to see first had the potential of the production facility, tasting room, and vineyard.
After several site tours of the property, the METIS team helped prepare financial forecasting for Patterson, exploring financial models that showed the positive future financial results should Patterson acquire the Tertulia Cellars assets. Patterson quickly made an offer that was accepted by Jim O’Connell.
After the letter of intent was signed by both parties, METIS got to work on the diligence portion of the deal. Since the seller lives in Arizona, METIS’ managed all aspects of property diligence including property reviews, water infrastructure, winemaking equipment, and viticultural review of the vineyard. METIS also helped Patterson establish a strong lending partner and coordinated financing for the acquisition, including working closely with the appraiser, providing appropriate comps that would help correctly value the property to meet Patterson’s lending requirements.
METIS’ client Jim O’Connell is thrilled with the result, getting a strong value for Tertulia’s assets, and Patterson Cellars is excited to have a strong presence in Walla Walla. The outcome of the deal allows Patterson to bring a significant portion of their wine making operations much closer to their grower and vineyard partners, while also giving Patterson an estate vineyard to add to their portfolio. Patterson, who sells 80% of their wine direct to consumer also gains a key retail location in Walla Walla, adding its 5th tasting room location in Washington.
“Woodinville has been great for us, but the fruit has always come from the Eastside. Some of my favorite growers and vineyards are in Walla Walla – we already get about 20% of our fruit from there. We just love the wines, the people, the town. It’s a great wine community that we are humbled to become a part of,” said Patterson Cellars founder John Patterson.