Pension fund diversifies into wine business

Pension fund diversifies into wine business

Pension fund diversifies into wine business Ontario Teachers’ has announced the acquisition of Constellation Brands Canada, the Canadian operation of international maker and marketer of alcoholic beverages Constellation Brands. Parties involved expect the transaction, which has been negotiated for approximately $1.03 billion, to close before the calendar year’s end.

According to the release from Ontario Teachers’, Constellation Brands Canada leads the country’s wine market, holding around three times the market share of its closest competitor and seven of the Canadian market’s top 20 wine brands.

“Constellation Brands Canada is an ideal addition to our consumer portfolio,” said Jane Rowe, senior vice president of private capital. “The company is already the undisputed market leader in the Canadian wine industry and has excellent potential for continued growth and value creation.”

The foundation for the Mississauga-based company’s expected growth and value creation is an integrated operation that includes three commercial wineries, five estate wineries, and 163 Wine Rack stores throughout Ontario. Among the company’s portfolio of domestic and international wines are well-known names such as Inniskillin, Jackson-Triggs, Kim Crawford, Robert Mondavi, Ruffino, Sawmill Creek and Wallaroo Trail.

“We look forward to partnering with Constellation's impressive management team and President and CEO Jay Wright to capitalize on long-term growth trends in the wine industry,” Rowe said. “Constellation delivers stable and predictable cash flows and provides us with an excellent investment platform in this growth industry.”

Citing Euromonitor Passport data, Bloomberg has reported Canada’s wine market to be worth US$9.2 billion, with potential for compounded annual growth of 3.9% up to 2020. Jackson-Triggs was said to be the best-selling label, while Inniskillin is the top icewine.

“Our Canadian management team is excited about working with Ontario Teachers' to take our business vision to the next level,” said Wright. “Their financial commitment and considerable expertise in helping their portfolio companies achieve meaningful strategic market advantages set the stage for an exciting partnership.”

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