Constellation Brands Buys Prisoner Wine for $285 Million

It recently paid $315 million for the Pinot Noir brand Meiomi, as it looks to grow its already significant wine business.

The deal encompasses five wine brands, headed up by its flagship Prisoner brand, along with Saldo, Cuttings, Blindfold and Thorn, which sell at premium prices.

 

The five wine brands have seen a volume increase of over 30 percent over the past years.

 

The deal is expected to be completed by the end of April.

 

Bill Newlands, president of the Wine and Spirits unit of Constellation Brands, said: “More than ever, consumers are seeking high quality, distinctive wines and the portfolio we are acquiring form The Prisoners Wine Company delivers.

 

“Huneeus Vintners is known for building luxury wine brands and excels in growing gems and turning them into powerhouse brands. These wines resonate with consumers and this acquisition further strengthens our position in the fine wine segment of the category.”

The purchase of Prisoner Wins came as Constellation Brands beat analysts’ expectations in its fourth quarter results and offered an optimistic outlook for the year ahead.

 

In the fourth quarter, net sales were up 14 percent to $1.1 billion and operating income was up 11 percent to $435 million.

 

Its performance was helped by strong sales in the US of Corona Extra and Modelo Especial.

 

Rob Brands, president and chief executive officer of Constelllation Brands, said: “"It has proved to be another dynamic year of significant accomplishments and impressive financial results for Constellation.”

 

"In fiscal 2016, our beer business delivered industry-leading market results as the #1 growth contributor in the U.S. beer category, achieving stellar growth across the portfolio. We also acquired Ballast Point, one of the most awarded, major craft brewers in the industry, and solidified our position in the high-end segment of the U.S. beer market.

 

“We successfully completed our first 5 million hectoliter capacity expansion at our Nava brewery, and we began investing in a new, state-of-the art brewery in Mexicali, Mexico, in order to support the ongoing momentum of our iconic Mexican beer brands. In our wine and spirits business, we further strengthened the financial profile by channeling resources and brand-building investments toward higher-growth, higher-margin brands.

 

“This strategy, combined with the Meiomi wine acquisition, helped to drive healthy margin expansion and earnings growth. Overall, we are excited to build on the success of fiscal 2016, as we are targeting impressive results for the coming

 

"This acquisition aligns with our portfolio premiumization strategy, enables us to capitalize on U.S. market trends that favor high-end wine brands and strengthens our position in the dynamic and margin enhancing super-luxury wine category,"