Former Hewlett-Packard chief Lew Platt is ending his short second career at Kendall-Jackson Wine Estates as founder Jess Jackson has decided to take the company off the market.
Platt, 60, was hired in January 2000 as chief executive to restructure the Santa Rosa, Calif.-based firm, one of the largest wineries in the country, and get it ready for a public offering or sale to a large international company that could further its global expansion plans.
But after the market for initial public offerings soured, and the company was unable to find a suitable buyer to pay his $2-billion asking price, Jackson decided to keep his family-owned company independent.
Jackson's wife, Barbara Banke, an attorney who chairs Kendall-Jackson's board, will take Platt's chief executive position, but the company's operations and strategic direction will be dictated by President John Grant, a veteran of Australian conglomerate Southcorp who joined the company 18 months ago as chief marketing officer. "Barbara is there as a representative of the family," said Jim Caudill, a company spokesman. "John will run the day-to-day. He's the de facto boss."
Platt is the second executive to leave since Jackson made his decision. Paul Ginsburg, executive vice president of strategic planning, resigned two weeks ago.
Kendall-Jackson officials say the decision to remain independent and rely on traditional bank financing and private placement funding won't hurt their expansion plans.
But analysts said going it alone could at least slow those plans.
"It makes it more challenging for the company," said Kristine Koerber, an analyst with W.R. Hambrecht & Co. "But that's not to say it can't be done."
Jackson had received offers from at least three companies. Diageo, the world's largest alcoholic-drinks producer, Brown-Forman Corp. and BRL Hardy Ltd., Australia's third-biggest winemaker, all made bids for the company. BRL Hardy said it walked away from the deal because the $2-billion asking price was too high.
"It's a big bite for any private company to pay what it's worth," said Eileen Fredrikson of wine consulting firm Gomberg Fredrikson & Associates. "My guess is that right now planning to go it alone is probably quite a fine decision. Kendall-Jackson is just tearing up the [U.S.] marketplace."
Kendall-Jackson's U.S. sales are running 35% ahead of a year ago, Caudill said.
Platt, whose retirement will become effective June 15, said that after the company decided to remain independent, he felt his work there was done.
He plans to grow grapes on a ranch he bought in western Sonoma County, fish with his wife, Joan, and serve on corporate boards. He is a director of Boeing Co. and the Packard Foundation.
"I had told Jess and Barbara that when we completed this transaction it would be a good time for me to go on," Platt said.
Platt was with Hewlett-Packard for 33 years, serving as CEO for seven years. He was hired by Kendall-Jackson after his retirement from HP in 1999.