Constellation Brands to buy San Diego craft brewer Ballast Point for $1 billion
San Diego-based Ballast Point Brewing Co. had filed plans with the Securities and Exchange Commission to go public.
Constellation Brands placed a big bet on the booming craft beer market Monday, announcing an agreement to purchase San Diego-based Ballast Point Brewing and Spirits for $1 billion.
Founded by a group of home brewers in 1996, Ballast Point was the 31st largest craft brewer in the country in 2014, according to the Brewer’s Association. It makes 40 styles of beer, including Sculpin IPA and Grapefruit Sculpin IPA, allowing Constellation to compete in the fast-growing craft beer segment, Constellation said.
As mainstream domestic beers have struggled in recent years, Constellation grew to become one of the nation’s beer giants by selling Mexican imports including Corona, Modelo Especial and Pacifico. It had already branched out into craft beers, teaming up with celebrity chef Rick Bayless and local craft brewery Two Brothers to launch Tocayo Hominy White Ale, a Belgian White-style beer, earlier this year.
“Along with imports, craft beer is a key driver of growth and premiumization within the beer industry, with craft doubling its share of the U.S. beer market in the last five years,” said Constellation CEO Rob Sands in a news release.
“Ballast Point has certainly been a key driver of that growth,” Sands said. “Their business philosophy and entrepreneurial spirit perfectly align with our culture and we look forward to strengthening our position in the high-end beer segment with what is arguably the most premium major brand in the entire craft beer business.”
Ballast Point founder Jack White and his management team will continue to run Ballast Point, Sands said. The craft brewer is on pace to sell 4 million cases of beer this year, more than doubling its sales in 2014, Constellation said.
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The transaction, which will be financed with a combination of cash and debt, is expected to close by year’s end.
Constellation is based in Victor, N.Y., with its beer division based in Chicago.
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