- 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, NY, Oct. 17, 2016 /CNW/ - 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.
SOURCE Constellation Brands