Constellation Brands to Buy Craft Beer Maker for $1 Billion

The Victor-based wine, spirits and beer company announced Monday it will acquire San Diego-based Ballast Point Brewing & Spirits for about $ 1 billion.

Craft-beer sales are growing fast, of course, and ounce-for-liquid-ounce may be more profitable than mainstream suds. In 2013, Constellation acquired us production and distribution of Modelo, the Mexican brewery that makes Corona and other beers, in a deal with Anheuser Busch InBev.

Chief Executive Rob Sands said the company “focus[es] nearly fully on the high end of the beer business, and [is] really focused only on the USA domestic business”.

Ballast Point is on pace to sell almost 4 million cases this year and expects net sales to be roughly $115 million. The 19-year old brewery made headlines last month as one of the first craft breweries in Southern California to file for an initial public offering, joining the likes of Boston Beer and Kona brewer Craft Brew Alliance. “To achieve that vision, we needed to find the right partner. Ballast Point has certainly been a key driver of that growth”. It employs more than 500 people, produces beer in four facilities in the San Diego area, and sells its beer in more than 30 states.

This is Constellation Brands’ biggest acquisition since 2012. The takeover will be neutral to Constellation’s profit in its current fiscal year and add about 6 cents to per-share earnings the following year, the company said. The transaction will be financed with cash and debt and is expected to close by CY15. Today, it is the third-largest beer company in the U.S. Constellation also sells wine brands such as Robert Mondavi and Kim Crawford, as well as as Svedka Vodka.