Continuing an acquisition spree, wine and beer distributor Constellation Brands said Wednesday it had agreed to buy five brands from Huneeus Vintners for $285 million to strengthen its position in fine wines.
Constellation became the third-largest beer company by volume in the U.S. in 2013 after acquiring rights to Corona and Modelo from Anheuser-Busch InBev and has been using the strong sales of those beers to make acquisitions.
The acquisition of the brands led by The Prisoner, a super luxury wine, is its third purchase in less than a year.
“More than ever, consumers are seeking high quality, distinctive wines and the portfolio we are acquiring from the Prisoner Wine Company delivers,” Bill Newlands, president of Constellation’s wine and spirits division, said in a news release.
“Huneeus Vintners is known for building luxury wine brands and excels in growing gems and turning them into powerhouse brands,” he added. “These wines resonate with consumers and this acquisition further strengthens our position in the fine wine segment of the category.”
The Prisoner wines, with a price per bottle mostly ranging from $30 to $50, collectively have grown at an annual rate of 30% over the past three years to 175,000 cases, Constellation said.
The news of the deal followed Constellation’s better-than expected earnings for the quarter that ended Feb. 28. Profit rose 13% from a year earlier to $243.4 million, or $1.19 a share, with revenue rising 14% to $1.54 billion from $1.36 billion.
The company said beer sales increased 22% to $806 million, while the wine and spirits division, which includes Mark West, Robert Mondavi, and Svedka Vodka, increased sales 7% to $737.2 million.
“In our wine and spirits business, we further strengthened the financial profile by channeling resources and brand-building investments toward higher-growth, higher-margin brands,” CEO Rob Sands said.
Constellation in August paid about $315 million for Meiomi, a Pinot Noir wine brand, and in November agreed to pay $1 billion for Ballast Point Brewing, the producer of Sculpin IPA.
“Like Meiomi, Prisoner’s red blends feature robust flavors now popular with wine consumers,” The Wall Street Journal noted.