- Announces sale of Canadian wine
business for approximately C$1.03 billion
- Reaches agreement to purchase
Charles Smith Wines
- Completes acquisition of High
West Distillery and acquires a minority stake in Bardstown Bourbon
Company
VICTOR, N.Y., Oct. 17,
2016 - Constellation Brands,
Inc. (NYSE: STZ and STZ.B), a leading beverage alcohol company,
announced today a number of transactions that will advance its
strategy of focusing on premium, high-margin, and high-growth
brands while building shareholder value.
Constellation has reached an agreement to sell its
Canadian wine business to Ontario Teachers' Pension Plan, the
largest single-profession pension plan in Canada. The transaction,
which includes Canadian wine brands such as Jackson-Triggs and
Inniskillin, wineries, vineyards, offices, facilities, and Wine
Rack retail stores is subject to regulatory approval and is
expected to close by the end of the calendar year. Constellation
Brands will continue ownership of Black Velvet Whisky and the
related production facility in Lethbridge, Alberta, Canada.
"In April, we announced plans to explore an
initial public offering for a portion of our Canadian wine business
as part of our strategy to focus on premium, high margin and high
growth brands. We seized the opportunity to sell the entire
business in a value-enhancing transaction when it presented
itself," said Rob Sands, president and chief executive officer,
Constellation Brands. "The Canadian wine business is the leader in
the Canadian wine market and is a long-term growth opportunity.
Ontario Teachers' Pension Plan is well-respected with a proven
track record for supporting and growing their investments, so we
know the business will be in good hands."-
The transaction is valued at approximately
C$1.03 billion, which represents an EBITDA multiple in the 12
times range when factoring in a full year of projected fiscal 2017
Canadian wine business EBITDA. The company expects to receive cash
proceeds, net of repayment of outstanding debt, of approximately
C$750 million, subject to closing adjustments, and expects to
recognize an after-tax gain for fiscal 2017, which will be excluded
from the company's comparable basis diluted earnings per share.
Further enhancing its U.S. wine portfolio,
Constellation announced today an agreement to acquire the Charles
Smith Wines collection of five super and ultra-premium wines for
approximately $120 million. The transaction, expected to close in
October, includes Kung Fu Girl Riesling, Velvet Devil Merlot, Boom
Boom! Syrah, Eve Chardonnay and Chateau Smith Cabernet Sauvignon.
With this acquisition, Constellation Brands will solidify its
position as the second leading supplier of Washington State wines,
gaining a collection of high quality wines that have strong
consumer affinity and demand, and have shown double-digit volume
growth over the last three years.
Related to its spirits portfolio, Constellation
has completed its previously announced High West Distillery
acquisition. The acquisition includes all of High West's operations
and its portfolio of distinctive, award-winning and high-end
American straight whiskeys. With High West, which has experienced
double-digit volume growth year over year for the past three years,
Constellation Brands enters the dynamic and profitable high-end
craft whiskey segment. Additionally, as part of the company's
venture activity, Constellation recently acquired a minority stake
in Bardstown Bourbon Company. "Investing in Bardstown, the largest
new whiskey distillery in the U.S., jumpstarts our opportunity to
further explore innovation in the brown spirits category," said
Sands. "With the acquisition of High West and the opportunity to
work with Bardstown Bourbon Company, we are strategically advancing
our spirits business with access to high-quality supply and
state-of the-art production capabilities."
About Constellation
Brands
Constellation Brands (NYSE: STZ and STZ.B) is a leading
international producer and marketer of beer, wine and spirits with
operations in the U.S., Canada, Mexico, New Zealand and Italy.
Constellation is a Fortune 500®
company and one of the top performing stocks in the S&P 500
Consumer Staples Index. Constellation is the No. 3 beer company in
the U.S. with high-end, iconic imported brands such as Corona
Extra, Corona Light, Modelo Especial, Modelo Negra and Pacifico.
The company's beer portfolio also includes Ballast Point, one of
the most awarded craft brewers in the U.S. In addition,
Constellation is the world's leader in premium wine, selling great
brands that people love, including Robert Mondavi, Clos du Bois,
Kim Crawford, Meiomi, Mark West, Franciscan Estate, Ruffino and
Jackson-Triggs. The company's premium spirits brands include SVEDKA
Vodka and Casa Noble Tequila.
Based in Victor, N.Y., the company believes that
industry leadership involves a commitment to brand building, our
trade partners, the environment, our investors and to consumers
around the world who choose our products when celebrating big
moments or enjoying quiet ones. Founded in 1945, Constellation has
grown to become a significant player in the beverage alcohol
industry with more than 100 brands in its portfolio, sales in
approximately 100 countries, about 40 facilities and approximately
9,000 talented employees. We express our company vision: to elevate life with every glass raised. To learn more,
visit www.cbrands.com.
Forward-Looking
Statements
This news release contains forward-looking statements. All
statements other than statements of historical fact are
forward-looking statements. The word "expect" and similar
expressions are intended to identify forward-looking statements,
although not all forward-looking statements contain such
identifying words. These statements may relate to business
strategy, future operations, prospects, plans, objectives of
management, and expectations relating to after-tax gain, as well as
information concerning expected actions of third parties. All
forward-looking statements involve risks and uncertainties that
could cause actual results to differ materially from those set
forth in or implied by such forward-looking statements.
The forward-looking statements are based on
management's current expectations and should not be construed in
any manner as a guarantee that such results will in fact occur or
will occur on the timetables contemplated hereby. All
forward-looking statements speak only as of the date of this news
release and Constellation Brands undertakes no obligation to update
or revise any forward-looking statements, whether as a result of
new information, future events or otherwise. The transaction with
Ontario Teachers' Pension Plan is subject to certain closing
conditions, including receipt of any necessary regulatory
approvals. There can be no assurance the transaction between
Constellation Brands and Ontario Teachers' Pension Plan will occur
or will occur on the contemplated terms and timetable. The
transaction with Charles Smith Wines LLC is subject to certain
closing conditions, including receipt of regulatory approval, and
there can be no assurance the transaction will occur or will occur
on the contemplated terms or timetable.
In addition to risks and uncertainties associated
with ordinary business operations, the forward-looking statements
contained in this news release are subject to other risks and
uncertainties, including completion of the announced transactions,
the accuracy of projections, and other factors and uncertainties
disclosed from time-to-time in Constellation Brands, Inc.'s filings
with the Securities and Exchange Commission, including its Annual
Report on Form 10-K for the fiscal year ended Feb. 29, 2016, which
could cause actual future performance to differ from current
expectations.
CONTACT
Media
Cheryl Gossin: 585-678-7191
Amy Martin: 585-678-7141
Investor Relations:
Patty Yahn-Urlaub: 585-678-7483
Bob Czudak: 585-678-7170
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Constellation Brands Inc via Globenewswire
Constellation Brands (NYSE:STZ)
Historical Stock Chart
From Aug 2024 to Sep 2024
Constellation Brands (NYSE:STZ)
Historical Stock Chart
From Sep 2023 to Sep 2024