Constellation Brands Inc. (NYSE: STZ and STZ.B) said it has agreed to acquire The Prisoner Wine Company’s portfolio of brands from Napa-based Huneeus Vintners.
The portfolio includes five fine wine brands led by The Prisoner, a fast-growing super luxury wine, and also includes Saldo, Cuttings, Blindfold and Thorn. The cash paid at closing for the deal is expected to be about $285 million. The transaction is expected to close by the end of this month and boost Constellation’s earnings per share by 3 cents to 5 cents in fiscal 2017.
This would be the second major purchase of North Coast brands by Victor, N.Y.-based Constellation in the past 12 months. The company bought the Meiomi brand from Joseph Wagner’s Rutherford-based Copper Cane LLC in August for $315 million.
Constellation said The Prisoner Wine Company is a fast-growing, super-luxury portfolio of five highly rated wine brands that have grown volumes at an annual rate of 30 percent over the last three years to reach 175,000 cases in 2015.
“This acquisition aligns with our portfolio premiumization strategy, enables us to capitalize on U.S. market trends that favor high-end wine brands and strengthens our position in the dynamic and margin enhancing super-luxury wine category,” said Rob Sands, president and chief executive officer of Constellation Brands.
High-end wines often are categorized as “ultrapremium,” retailing for $14–$25 per standard 750-milliliter bottle; “luxury,” $25–$50; “super luxury,” $50–$100; and “icon,” $100-plus.
The brands from The Prisoner Wine Company have grown quickly over the last three years, offering a portfolio of unique wine blends anchored by The Prisoner. Launched in 2003, The Prisoner soon became the most recognized innovative and unique Napa Valley red wine blend, leading the resurgence of blends. Today the brand is the No. 1 super-luxury red blend, growing 28 percent in retail sales since last year, while maintaining a strong presence in the on-premise category, which includes restaurants and hotels.
The Prisoner has a consistent track record of 90-plus-point scores and has been a Wine Spectator Top 100 wine three times. Saldo is the No. 2 super-luxury zinfandel with IRI-tracked dollar sales growth of more than 40 percent over the last 52 weeks, while Blindfold is the No. 1 super-luxury white blend.
“More than ever, consumers are seeking high quality, distinctive wines and the portfolio we are acquiring from The Prisoner Wine Company delivers,” said Bill Newlands, president of Constellation’s Wine and Spirits Division. “Huneeus Vintners is known for building luxury wine brands and excels in growing gems and turning them into powerhouse brands. These wines resonate with consumers and this acquisition further strengthens our position in the fine wine segment of the category.”
Huneeus Vintners and Constellation have a strong history of respect and success working together, according to Agustin F. Huneeus, president of Huneeus Vintners.
“Our team — including employees, growers, distributors, and winery partners — have created and built an exceptional portfolio of fine wines and we are very proud of the success they have achieved in a relatively short timeframe,” Huneeus said. “Constellation’s market reach, business intelligence and access to high quality grapes, will enable the brands’ continued growth momentum.”
Huneeus Vintners and Constellation will maintain a winemaking consulting agreement with Jen Beloz, The Prisoner Wine Company general manager and winemaker, and her production team, to ensure continuity in the styles of the wines. The wines will have further access to premium Napa County fruit through Constellation’s sources, and winemaking and production will occur at Constellation’s Franciscan Estate winery.