WASHINGTON (dpa-AFX) - Constellation Brands Inc. (STZ, STZ.B) said that it agreed to sell its Canadian wine business to Ontario Teachers' Pension Plan, the largest single-profession pension plan in Canada, for about C$1.03 billion.
The transaction, which includes Canadian wine brands such as Jackson-Triggs and Inniskillin, wineries, vineyards, offices, facilities, and Wine Rack retail stores is subject to regulatory approval and is expected to close by the end of the calendar year.
Constellation Brands said it will continue ownership of Black Velvet Whisky and the related production facility in Lethbridge, Alberta, Canada.
'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, president and chief executive officer, Constellation Brands.
The transaction value of about C$1.03 billion represents an EBITDA multiple in the 12 times range when factoring in a full year of projected fiscal 2017 Canadian wine business EBITDA.
The company expects to receive cash proceeds, net of repayment of outstanding debt, of approximately C$750 million, subject to closing adjustments, and expects to recognize an after-tax gain for fiscal 2017, which will be excluded from the company's comparable basis diluted earnings per share.
Constellation announced today an agreement to acquire the Charles Smith Wines collection of five super and ultra-premium wines for approximately $120 million. The transaction, expected to close in October, includes Kung Fu Girl Riesling, Velvet Devil Merlot, Boom Boom! Syrah, Eve Chardonnay and Chateau Smith Cabernet Sauvignon.
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