Market Overview

Constellation Brands Sells Black Velvet Whisky Brand

Share:
Constellation Brands Sells Black Velvet Whisky Brand

Constellation Brands, Inc. (NYSE: STZ) said in a press release it reached an agreement to sell its Black Velvet Canadian Whisky brand as part of an ongoing "premiumization strategy."

What Happened

Constellation Brands agreed to sell the Black Velvet Canadian Whisky and associated production facilities in Alberta, Canada to Heaven Hill Brands for $266 million. The deal also includes a subset of Canadian whiskey brands, which are produced at the same Alberta facility.

Total net sales of all brands included in the transaction were $67 million during fiscal 2019, the company said. The price tag on the deal represents a multiple of gross profit after marketing of around eight to nine times.

Why It's Important

Constellation's motivation to shed smaller assets is consistent with management's desire to focus exclusively on premium brands to better deliver accelerated growth and shareholder value, the company said.

"We are relentlessly focused on the consumer and building a portfolio of brands consumers love today, while pushing beyond to meet their evolving needs well into the future," said Bill Newlands, Constellation Brands president and CEO.

Heaven Hill is acquiring a high-volume brand that aligns with its business objectives and complements its broad spirits portfolio, Newlands also said.

Constellation's asset sale to Heaven Hill remains subject to regulatory approvals and is expected to close by the end of 2019.

Constellation's stock closed Monday at $193.05 per share.

Related Links:

Constellation Brands Analysts Bullish After Q1 Print

The Street's Reaction To Constellation Brands Earnings, Wine Divestiture

Posted-In: alcohol Bill Newlands Black Velvet Canadian WhiskyNews Asset Sales Best of Benzinga

 

Related Articles (STZ)

View Comments and Join the Discussion!
Fastest Market News Application
You'll Hear It First On Pro
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

6 Energy Stocks Moving In Tuesday's Pre-Market Session

4 Industrials Stocks Moving In Tuesday's Pre-Market Session