US-based alcoholic beverage maker Constellation Brands has agreed to acquire San Diego-based Ballast Point Brewing & Spirits for $1bn.
Ballast Point is a US-based craft beer company with an expansive portfolio that includes almost 40 varieties of beer, including Sculpin IPA and Grapefruit Sculpin IPA.
The company expects that the acquisition will provide the growth platform which will enable it to strengthen its foothold in the craft beer segment, fortifying its position in the US beer market.
Following the acquisition, Ballast Point will continue to function as a separate company with its management team intact overseeing the daily operations. The team will continue to focus on expansion across the US with access to Constellation's financial assets that would help in the growth strategy.
Ballast Point Brewing & Spirits founder Jack White said: "We started this business nearly 20 years ago with a vision to produce great beer that consumers love and to do it the right way. To achieve that vision, we needed to find the right partner. The team at Constellation shares our values, entrepreneurial spirit and passion for beer, and has a proven track record of helping successful premium brands reach the next level of growth and scale."
Constellation Brands CEO Rob Sands said: "We believe in the vision that Jack and his team have created and we're excited to welcome Ballast Point, one of the most respected craft brewers in the country, to the Constellation Brands family. Along with imports, craft beer is a key driver of growth and premiumization within the beer industry, with craft doubling its share of the US beer market in the last five years. Ballast Point has certainly been a key driver of that growth.
"Their business philosophy and entrepreneurial spirit perfectly align with our culture and we look forward to strengthening our position in the high-end beer segment with what is arguably the most premium major brand in the entire craft beer business."
Constellation Brands expects the acquisition to have a neutral effect on the diluted earnings per share for fiscal 2016 and $0.05 to $0.06 accretive for fiscal 2017. The deal will be funded through a combination of cash and loan. The transaction expected to be completed by the end of 2015, subject to regulatory approvals and customary closing conditions.
Ballast Point was established in 1996 with a small group of brewers and is currently expecting to sell almost four million cases in 2015, representing a 100% growth as compared to the previous year, according to company release.
Recently, Constellation Brands acquired a minority stake in Crafthouse Cocktails. The deal entailed that Crafthouse Cocktails would continue to operate independently to produce and sell its products including ready-to-drink, spirits-based cocktails.
Image: Constellation adds Ballast Point to its beer portfolio. Photo: Courtesy of dan/FreeDigitalPhotos.net.
