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It Gives Me Great Pleasure to Introduce You to Mr. William Chong

You would think that a seemingly innocuous speech by financier Bill Price at a recent North Bay Business Journal wine industry conference would be much ado about nothing.

You would be wrong, however.

A more flippant lead to this post would surely start with a quote from “Sympathy for the Devil” by the Rolling Stones, or, perhaps, Tony Montana from Scarface.

“Please allow me to introduce myself …”

Or,

“Say hello to my little friend …”

While not above it at other times, in this instance I will roll with the straight facts.

I’ve seen reference to Price’ comments in at least three different places, and while I get around, I do not read that much.

In a nutshell, Price said, as excerpted from a coverage piece by the North Bay Business Journal:

The wine business is approaching a historic period in which 1,000 to 2,000 of the 2,400 wineries in California could be for sale in the next 10 years, Bill Price told the audience of nearly 300 at the BUSINESS JOURNAL’s Wine Industry Conference at the Vintners Inn. He was citing a Silicon Valley Bank/Scion Advisors study on winery ownership succession released earlier this year.

“In a growing or consolidating industry, it generally pays to sell early or late,” he said, regarding timing in relation to the trend. “If you sell in the middle, there generally are compressed multiples.”

That’s because there are few properties for sale at the beginning, so buyers are paying higher multiples of earnings before taxes, depreciation and amortization (EBITDA) than they would after a few years, when neighbors see the high multiples and put their businesses on the market, according to Mr. Price.

Frankly, seeing this blurb in several different spots reminded me of political coverage where the slightest sound bite is blown up, spun and covered unmercilessly by talking heads.  Surely, it cannot be that big of a deal, right?

Maybe it is a big deal.  Could it be that for all of the advocating that bloggers do online about small wine, terroir, and other high brow, nuanced wine-related thought-leadership types of things that we are really in the midst of the halcyon days?  In 10 years time will we look back wistfully at the good old days, the pre-2008 era in wine?

Separately, I have been managing the Wine Business Network group that I started at the professional networking site LinkedIN. Slowly, surely, and without effort, it has grown to 275 members in two months time.  It has folks of all stripes from the wine industry—big wineries, little wineries, distributors, retailers, the whole gamut.  Likewise, I have rejected membership for a fair number of folks that did not fit the criteria for “Wine Business.”  Recruiters, oddball vendors and the like have been politely rejected for membership.  I’ve been trying to keep it for wine folks.

Today, however, I received a request from a Mr. William Chong.  Mr. Chong is the Head of Alternative Fund Services at HSBC. 
HSBC is the world’s largest bank.  HSBC is also based in China.  I hear the Chinese are taking a liking to wine.

Alternative Fund Services at HSBC, based on my own cursory review, provides fund administration services to customers that might include hedge fund managers, funds of hedge fund managers, absolute return fund managers and private equity partners.

Perhaps, it is not so coincidental that Bill Price founded Texas Pacific Group, a private equity firm.  He knows that which he speaks, particularly, it would seem, about winery sell-offs and acquisitions.

I find it curious that unexpectedly I would see a notation about a winery sell-off and all of a sudden and out of the blue somebody from the world’s largest bank that supports hedge funds and private equity would want to be a part of the Wine Business Network.

Perhaps I am being hyperbolic, as I am wont to do.  Perhaps, not.  Nonetheless, I approved Mr. Wong’s membership, contrary to my own previous arbitration about who gets in.

Dear Wine Industry:  Please allow me to introduce you to Mr. William Chong.  He works for a bank with a lot of money.  I hear that some of you guys may have your winery up for sale in the next decade.  Some folks say you might want to do it sooner, rather than later.

If you want to join the Wine Business Network at LinkedIn, you must have a profile and you can request membership at this link.  I will not be taking any finders fees, a case of wine will suffice.  I am sure you will have Sympathy for the Devil.



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