Constellation Puts Canadian Wine Business On Block, Eyeing More Than $1 Billion
October 3, 2016Constellation Brands has put its Canadian wine business on the block, and it’s likely to fetch more than $1 billion, according to the Wall Street Journal, which added that Constellation had already received several offers for the business. The Journal reported that the Ontario Teachers’ Pension Plan and a potential buyer from the drinks industry are among the suitors.
Earlier this year, Constellation said it planned to explore an initial public offering for the Canadian business, which it added a decade ago by acquiring Vincor International—Canada’s biggest wine player—for around $1.1 billion. However, the IPO plans were scrapped after Constellation received bids for the business.
Constellation’s Canadian wine business includes wineries such as Jackson-Triggs and Inniskillin, along with a half-dozen others. It accounts for roughly 10% of the company’s overall sales—just over $650 million. The Vincor deal also included assets like Kim Crawford—the fast-rising New Zealand wine brand—and California’s Toasted Head. Neither of those brands are part of this sale.
With its beer business—led by Corona and Modelo Especial—booming over the past few years, the Victor, New York-based Constellation has made a concerted effort to bolster its U.S. presence while streamlining operations elsewhere. Over the past 18 months, Constellation has spent more than $1.5 billion to acquire Meiomi, The Prisoner Wine Co. and craft brewer Ballast Point. In 2010, Constellation shed its Australian and U.K. wine business (much of which was acquired via the Vincor deal), selling it to Australian private equity firm CHAMP for nearly $300 million. —Peter Zwiebach
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