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Constellation Strikes More Deals, Buying Charles Smith Brands And A Stake In Bardstown Bourbon, Selling Canada Wines

October 17, 2016

Continuing its run of aggressive dealmaking, Constellation Brands has sold its Canadian wine business to the Ontario Teachers’ Pension Plan for C$1.03 billion ($784m), while also acquiring five upscale wine brands from Washington-based Charles Smith Wines for $120 million.

The Charles Smith wines include Kung Fu Girl Riesling, Velvet Devil Merlot, Boom Boom! Syrah, Eve Chardonnay and Chateau Smith Cabernet Sauvignon. Constellation says the deal will solidify its position as the second-largest supplier of Washington state wines (after Ste. Michelle Wine Estates). Kung Fu Girl, twice named to Wine Spectator’s Top 100 list, is among the leading super-premium Riesling brands in Nielsen channels, with sales up 45% over the past year. Boom Boom! Syrah is an ultra-premium Syrah that has advanced by over 50% in the same time period, while Velvet Devil is a super-premium standout in Washington’s Merlot segment. The deal doesn’t include Charles Smith’s K Vintners, Wines of Substance, ViNO, Casa Smith, SIXTO, B. Leighton and Charles & Charles brands.

Meanwhile, Constellation says the move to divest its Canadian wine business—acquired via its $1.3 billion purchase of Vincor in 2006—furthers its strategy of focusing on “premium, high-margin, and high-growth” wine labels. That transaction, expected to close by the year-end, includes the Jackson-Triggs and Inniskillin brands, as well as wineries, vineyards, Wine Rack retail stores and other holdings. Constellation will retain its Black Velvet Canadian whisky brand and related production facility in Lethbridge, Alberta.

In another, smaller deal, Constellation has also revealed that it recently took a minority stake in Kentucky’s Bardstown Bourbon Co., one of the largest of the new crop of craft whiskey players. That purchase complements the company’s acquisition of Utah’s High West, which SND reported exclusively on October 4. —Daniel Marsteller

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