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UPDATE 2-Constellation Brands sells some wine brands
June 10, 2008 / 12:21 PM / 9 years ago

UPDATE 2-Constellation Brands sells some wine brands

(Adds details on buyer, stock activity)

NEW YORK, June 10 (Reuters) - Beer, wine and spirits company Constellation Brands Inc (STZ.N) said on Tuesday it sold several wine brands to Ascentia Wine Estates, a newly formed company, for $209 million.

Included in the sale are the Geyser Peak, Buena Vista, Gary Farrell and Atlas Peak brands.

Ascentia, also known as Eight Estates Fine Wines LLC, was formed by a group of investors including Jim DeBonis, former chief operating officer of Beam Wine Estates; William and Peter Deutsch, who run wine importer W.J. Deutsch & Sons Ltd; and GESD Capital Partners, a San Francisco-based private equity firm.

This is Ascentia’s first acquisition.

Constellation, whose shares rose nearly 2 percent in morning trade, said it could receive up to an additional $25 million in payments if the buyer met certain targets. It plans to use the proceeds to pay down debt.

As a result of the sale, Constellation said it expects to record a pretax loss of about $23 million, or 8 cents per share, due mostly to the write-off of goodwill.

Excluding the loss, Constellation affirmed its forecast for the current fiscal year, ending next February, saying it still expects to earn $1.68 to $1.76 per share excluding items.

Constellation owns brands like Robert Mondavi wine and Effen Vodka. Through a joint venture with Mexico’s Modelo GMODELOC.MX, it sells beers including Corona, Negra Modelo and St. Pauli Girl in the United States.

Its shares were up 38 cents at $21.15 on the New York Stock Exchange. (Reporting by Martinne Geller, editing by Gerald E. McCormick and Dave Zimmerman)

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