Silicon Valley Bank wine boss ‘hopeful’ interested parties will buy wine division

The former head of Silicon Valley Bank’s wine division Rob McMillan has said he is hopeful the wine division will be bought in its entirety by another bank or private organisation, claiming there were a number of interested parties. 

In an interview with the North Bay Business Journal last week, Rob McMillan, the former executive vice president and founder of the Premium Wine Division, Silicon Valley Bank (SVB) told reporters that there were seven parties that were interested in taking on the wine division, “including three banks and one private financial organization”.

It comes after the struggling Californian based bank was taken over by the federal government  on 10 March after a rush of depositors withdrew their funds.  The failure of the bank came as a big shock, not only to heavily exposed tech start-ups, but also the California wine community – SVB had loaned over $4 billion to the wine industry since 1994, with around $1.2 billion currently lent in outstanding loans, its  Q4 earnings said. The UK arm was subsequently bought last Monday (20 March) by Europe’s biggest bank, HSBC, for £1 .

McMillan told the journal that he hoped it would be possible to keep the wine division team together. He argued that it would take “a relatively large bank” to take on the whole division of 35 employees, “given the size of its $1.1 billion portfolio” – but that it was possible.

“Other banks, such as First Republic, have wine divisions,” he told the North Bay Business Journal, pointing also to “smaller banks with a desire to expand their wine portfolios” who were potentially thinking about forming “separate teams to handle wine loans and investments”.

He said however that it would be hard to split the SVB’s wine division staff into smaller groups and still “accomplish all that these people [had] handled given the individual talents of its members and their expertise in different areas.”

“A number of banks and institutions have come forward interested in assuming various assets. My hope is that it won’t be long before such agreements are made,” he said.

McMillan was also the author and analyst for the bank’s well-respected annual State of the Industry Report, which he is also hopeful will be sold as an ongoing asset, as it was “key guide” for many wineries’ strategic planning.

“In my view, an alternative does not exist when it comes to a comprehensive source for wine industry reporting,” he argued. “At street level, it is the only intelligence that covers the market — but it takes an organization to do this right.”

He told the North Bay Business Journal that he had “already heard from a few who would like to adopt it, including wine organizations”, but that the report cost “in excess of $100,000” to put together, in addition to salaries for the team involved.

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