The owners of the Napa Valley’s Silver Oak and Twomey wineries have purchased Ovid, an estate vineyard and winery in St. Helena’s Pritchard Hill. The price, according to an industry source: around $50 million.

The acquisition, announced Friday, follows E. & J. Gallo’s high-profile purchase last month of Stagecoach Vineyard, also on Pritchard Hill, for an estimated $180 million. In such close succession, these purchases of premium vineyard land in one of the most expensive part of the Napa Valley show the degree to which California’s wine industry continues to trade up, betting on the growth of the market’s highest-priced segments.

Ovid has received remarkable critical acclaim in the nine years since its first wines were sold. Its founders, software entrepreneurs Mark Nelson and Dana Johnson, purchased the property in 1998 and planted a 16½-acre estate vineyard in 2000. They assembled a team of wine-industry celebrities: viticulturist David Abreu and consulting winemaker Andy Erickson, as well as managing partner Janet Pagano and winemaker Austin Peterson.

Silver Oak’s roots in Napa are deeper. It was founded in 1972 by Ray Twomey Duncan, whose sons David and Tim operate the business today. The sons started Twomey Cellars in 1999. Between the family’s two Silver Oak wineries (in Oakville and Geyserville) and two Twomey properties (in Calistoga and Healdsburg), it produces about 100,000 cases of wine; its most expensive bottle, Napa Valley Cabernet Sauvignon, costs $125. Ovid, at around 2,000 cases, is a smaller operation, and sells about 80 percent of its wine directly to consumers, rather than through wholesalers. Its mailing list has a waiting list. Ovid’s current releases cost $285 per bottle.

David Duncan said he’d long had his eye on Pritchard Hill, widely considered Napa’s most prestigious growing area, home to wineries including Continuum, Bryant, Colgin and Chappellet. “I’d been working on a number of deals up there, and this was the one that was brought to the finish line,” he said.

“Mark and Dana and I have been friends for a long time,” said Duncan. “When they made the decision to sell, they sought out people that they knew would be the right stewards for the brand. We made the deal over the kitchen table, literally.”

“I don’t think there’s any intention to change much at all,” said Peterson, who will retain control of the winemaking. “We’ll continue the indulgence of curiosity” — creating experimental wines — “that we’ve worked hard to culture at the winery.” Jack Bittner, former president of Cliff Lede Vineyards in Yountville, will join as managing partner.

The estate’s fruit will continue to be used exclusively for Ovid wines. Production volume and wine prices will not change immediately, Duncan said, but “there is some plantable acreage that we plan to put into production in the next couple of years,” and of course, prices “depend on future vintages and demand.”

Why did the founders want to sell? “They have a lot of things going on in their life,” said Peterson, who added that they would continue to live in their home on the Ovid property.

A brand like Ovid certainly increases the prestige of the Duncan family’s winery holdings. But the Duncans are shrewd businesspeople, and the move suggests the growing viability of low-volume, high-priced winemaking as a business model.

Read more at Source: San Francisco chronicle