Constellation Brands to sell Canadian wine business to OTPP for C$1.03B
Constellation has reached an agreement to sell its Canadian wine business to Ontario Teachers' Pension Plan, the largest single-profession pension plan in Canada. The transaction, which includes Canadian wine brands such as Jackson-Triggs and Inniskillin, wineries, vineyards, offices, facilities, and Wine Rack retail stores is subject to regulatory approval and is expected to close by the end of the calendar year. Constellation Brands will continue ownership of Black Velvet Whisky and the related production facility in Lethbridge, Alberta, Canada. The transaction is valued at approximately C$1.03B, which represents an EBITDA multiple in the 12 times range when factoring in a full year of projected fiscal 2017 Canadian wine business EBITDA. The company expects to receive cash proceeds, net of repayment of outstanding debt, of approximately C$750M, subject to closing adjustments, and expects to recognize an after-tax gain for fiscal 2017, which will be excluded from the company's comparable basis diluted EPS.