Constellation Brands to Sell U.K. Cider Business to C&C
The sale is expected to result in a nominal gain on the transaction, which will be excluded from the company's comparable basis diluted earnings per share (EPS).
30 Nov 2009 --- Constellation Brands, Inc., the world's leading wine company, announced that it has entered into an agreement to sell its Gaymer Cider Company business to C&C Group PLC of Dublin Ireland for 45 million pounds Sterling, or approximately $70 million, subject to closing adjustments. The transaction is expected to close by mid-January 2010.
"The Gaymer cider business has been a valued and respected part of Constellation's European operations for many years," said Rob Sands, president and chief executive officer, Constellation Brands. "However, as the company's strategy has evolved to focus on premium higher-growth, higher-margin wine, beer and spirits brands, it made good strategic sense to sell the cider business. Overall, Constellation continues to pursue opportunities and strategies that promote the simplification of its international organization, the improvement of efficiencies, return on invested capital, cash flow and the reduction of costs."
Constellation expects that proceeds from the sale will be used to reduce its borrowings. The sale is expected to result in a nominal gain on the transaction, which will be excluded from the company's comparable basis diluted earnings per share (EPS). The impact of this transaction is expected to be neutral to ongoing reported basis and comparable basis diluted EPS for fiscal 2010.
As part of the transaction, C&C will receive all Gaymer cider brands including Blackthorn Cider, Gaymers Original and Pear Cider, Addlestones and Olde English Cider along with a production facility and associated warehouses and distribution facilities. "C&C has a strong track record for growing the cider and beer brands that they own, which makes this mutually beneficial for both companies," said Sands. "I want to thank the cider employees who have worked tirelessly to make the business profitable and successful and wish them well into the future."
