USA: Constellation Brands purchases US craft brewer Ballast Point Brewing & Spirits

Constellation Brands made a splash in the beer sector in 2013 when it purchased Grupo Modelo’s USA beer business from Anheuser-Busch InBev for $4.75 billion, giving it access to the Corona, Modelo and Pacifico brands from Mexico and Tsingtao from China.

The company now is looking forward to adding Ballast Point Brewing & Spirits as a craft beer to their portfolio, TV Newsroom reported on November 17.

Craft-beer sales are growing fast, of course, and ounce-for-liquid-ounce may be more profitable than mainstream suds.

“Along with imports, craft beer is a key driver of growth and premiumization within the beer industry, with craft doubling its share of the USA beer market in the last five years”, Constellation CEO Rob Sands said in a statement. Due to the resurgence of IPA beers the company is expecting to have net sales of almost $115 million by the end of 2015. This purchase will be the company’s first incursion into the world of craft beer. It has grown to three locations in San Diego and produces a few 40 beers as well as other beverages.

“To achieve [our] vision, we needed to find the right partner”.

Ballast Point began 20 years ago and was founded by a group of homebrewers.

Initial reports suggest the brewery will continue to operate as a stand-alone company with its existing management team and employees running day-to-day operations. The transaction will be financed with cash and debt and is expected to close by CY15.

Constellation Brands predicts that this acquisition will mean neutral to diluted earnings per share for fiscal year 2016 and $0.05 to $0.06 accretive for fiscal year 2017. Today, it is the third-largest beer company in the U.S.

The company also owns Robert Mondavi wines and Svedka vodka.

17 November, 2015