Constellation Brands Acquires Ballast Point Brewing & Spirits

Another well-established craft brewery has been bought by a major alcohol company.

Constellation Brands announced Monday that it has successfully acquired the San Diego-based Ballast Point Brewing & Spirits.

The purchase price is approximately $1 billion.

The Ballast Point a beer portfolio includes more than 40 different styles of beer, led by its popular and ubiquitous Sculpin IPA and Grapefruit Sculpin IPA.

The partnership with Ballast Point “provides a high-growth premium platform that will enable Constellation to compete in the fast-growing craft beer segment, further strengthening its position in the highest end of the U.S. beer market,” Constellation Brands said in a press release.

Ballast Point started in 1996 as a small group of home brewers. It will continue to operate as a stand-alone company with its existing management team and employees running the day-to-day operations. The Ballast Point team will continue to build on its successful expansion across the U.S., the company said, and will now have access to Constellation’s strong financial position and willingness to invest in growth.

“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,” said Jack White, founder of Ballast Point Brewing & Spirits. “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.”

Ballast Point is on pace to sell nearly 4 million cases in calendar 2015, the company said, which would represent growth of more than 100 percent versus calendar 2014. Net sales for calendar 2015 are expected to approximate $115 million. Volume and net sales growth from calendar 2012 to calendar 2014 averaged over 80 percent.

Ballast Point employs more than 500 employees, produces beer in four facilities in the San Diego, CA area, and sells its beer in over 30 states.

The $1 billion purchase price values the acquisition multiple of the projected calendar 2016 Ballast Point EBITDA in the mid-to-high teens range, the company said. Constellation estimates that on a comparable basis, the acquisition is expected to be neutral to diluted earnings per share for fiscal 2016 and $0.05 to $0.06 accretive for fiscal 2017.

The transaction will be financed with cash and debt, and is expected to close by the end of calendar year 2015, subject to customary closing conditions.

1 Comment

  1. Constellation Brands Reports 12% Growth In Fiscal 2017 Behind Beer | Beverage Dynamics Reply

    […] Net sales for the beer business increased 17$. This was due to a 13% increase in organic net sales driven primarily by volume growth and favorable pricing, the company says, and the acquisition benefit from Ballast Point. […]

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