Constellation Brands Sells Canadian Wine Business and Acquires US Winemaker Charles Smith
18 Oct 2016 --- Constellation Brands has continued its deal-making activity with the sale of its Canadian wine business for around $750m and the $120m purchase of the premium portfolio of cult US winemaker Charles Smith Wines.
It is selling its Canadian wine business, which includes wine brands such as Jackson-Triggs and Inniskillin to Ontario Teachers' Pension Plan, Canada's largest pension scheme, as it shifts away from offering selling less premium brands.
“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, Chief Executive, and 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.”
Constellation, which makes Robert Mondavi wines, has also announced the acquisition of five premium wines from cult US winemaker Charles Smith Wines, whose wines are popular with millennials.
The five brands are Kung Fu Girl Riesling, Eve Chardonnay, Boom Boom Syrah, Velvet Devil Merlot and Chateau Smith Cabernet Sauvignon and sell for up to $15 a bottle.
Constellation says it will become the second largest supplier of Washington state wines following the acquisition.
“Charles Smith is a visionary in the wine business and we are excited to welcome him to Constellation Brands and bring these wines to a larger audience,” said Bill Newlands, President, wine and spirits division, Constellation Brands.
“With the addition of this collection, we strengthen our core wine portfolio and augment our innovation capabilities to stay ahead of consumer trends. I am looking forward to working with Charles and tapping into his creative genius to fuel our wine innovation.”
“I created Charles Smith Wines so that everyone could experience a great tasting, quality wine, at an affordable price,” said founder Charles Smith.
“The quality of grapes in Washington State is incredible, and I have been able to put the best wines I can in a bottle for people to enjoy. Constellation Brands has a proven track record of acquiring and working with brands and companies to help them reach the next level. With Constellation Brands, we now have the opportunity to share these wines with the world.”
The deals comes just week after Constellation Brands acquired High West Distillery, the craft spirits maker for $160m, which followed its $1bn purchase of craft beer maker Ballast Point and its $285m acquisition of The Prisoner Wine Company.
