US/CANADA. Constellation Brands Inc has acquired Canadian winemaker Vincor International Inc for about C$1.5 billion the two companies announced today.
The deal comes as a surprise after Vincor International Inc, owner of the hugely-successful Inniskillin Icewine brand, appeared to have headed off a long-running hostile takeover bid by Constellation in December.
After its efforts were frustrated by a spirited Vincor defence, Constellation said it had “other priorities” after its C$1.2 billion (US$1 billion), C$33 per share offer expired at midnight on 8 December.
Then, Vincor’s board had rejected Constellation’s offer as financially inadequate, and declined to give the liquor giant access to its data room.
Today’s transaction price represents a premium of +55.5% to Vincor’s closing share price on 27 September, 2005, prior to Constellation’s initial approach, and a premium of +15.9% to Vincor’s closing share price on March 31, 2006. Including net outstanding debt, the total transaction value of C$1.5 billion represents a multiple of 13.1 times fiscal 2006 consensus EBITDA, which is consistent with similar transactions.
Vincor’s flagship brand Inniskillin (see Factfile for full portfolio) has been one of the great successes of the global duty free industry of the past 20 years. It is handled exclusively in duty free by Imagination Unlimited International, owned by Lars and Beverly Johansson, which has also been enjoying recent success with other Vincor lines in the channel, notably Kim Crawford wines from New Zealand and Jackson-Triggs.
“We are pleased that Constellation has offered a value that recognizes our strong brands, exceptional workforce and significant international growth opportunities,” said Donald Triggs, President and Chief Executive Officer, Vincor International Inc.
“Through the dedication and hard work of all of our employees we have built one of the world’s leading wine companies. This transaction marks the next chapter in the evolution of Vincor, providing strengthened international distribution for our leading brands and new opportunities for our employees. I would like to thank all of of our shareholders and many supporters who have contributed to the creation of a truly great company and Canadian success story.”
“Discussions and diligence led the Constellation and Vincor management teams and boards of directors to the conclusion that this is a mutually beneficial transaction because it is a natural fit for both companies,” stated Richard Sands, Constellation Brands’ Chairman and Chief Executive Officer.
“Through this combination, Canada will become a core market for Constellation, while adding new and existing brands to our already formidable portfolio in other key markets. Our cultures, values and decentralized structures are similar, and we are confident that this is in the best interest of both companies’ brands, shareholders, customers and employees. The combination of Vincor with Constellation will result in a world class, all-star team of people, vineyards, wineries and an unequalled international wine portfolio, in addition to long-term value creation.”
VINCOR FACTFILE
Vincor International Inc. is the world’s eighth largest wine company by revenue. Vincor has wineries in British Columbia, Ontario, Quebec, New Brunswick, California, Washington State, Western Australia and New Zealand, and is one of the largest wine importers, marketers and distributors in the United Kingdom.
Vincor markets wines produced from grapes grown in the Niagara Peninsula of Ontario, the Okanagan Valley of British Columbia, the Dunnigan Hills of California, the Columbia Valley of Washington State, Western Australia, New Zealand, South Africa and vineyards around the world. Vincor’s premium brands include Inniskillin, Jackson-Triggs, R.H. Phillips, Toasted Head, Hogue, Goundrey, Amberley, Sumac Ridge, Hawthorne Mountain, Kim Crawford, Kumala, Ancient Coast and Sawmill Creek, which complement its popular priced wines such as Entre-Lacs, L’Ambiance, Sola Nero and Notre Vin Maison.
CONSTELLATION BRANDS FACTFILE
Constellation Brands claims to be the number one wine company in the world and the leading fine wine company. It is also the leading US wine company by retail dollar value, the number one wine producer in Australia, the leading independent UK wholesaler and the number two wine producer in New Zealand.
Its brand-owing companies are:
– Constellation Wines U.S.
– Centerra Wine Company
– North Lake Wines
– Pacific Wine Partners
– Constellation Europe
– Hardy Wine Company
– Icon Estates
– Nobilo Wine Group
