Constellation Brands will borrow $400 million to help finance the $1 billion purchase of San Diego’s Ballast Point Brewing, the company said in a statement.
The cross-category beverage alcohol producer has tapped a banking syndicate that includes Bank of America Merrill Lynch, J.P Morgan Securities, Rabo Securities, Wells Fargo Securities, SunTrust Robinson Humphrey, Mitsubishi UFJ Securities, Goldman, Sachs & Co., Scotia Capital, Barclays Capital and BBVA Securities.
Constellation Brands will pay a 4.75 percent interest rate on a semi-annual basis (June 1 and Dec. 1), according to filings, and it has until 2025 to repay the loan.
In the statement, the company said it also expects the acquisition of Ballast Point, announced Monday, to close on Dec. 4.
One financial advisor Brewbound spoke to noted that the total $1 billion price tag and the $400 million of bank financing aren’t particularly large sums relative to industry norms, despite the fact that Ballast Point’s 2015 earnings are only expected to hit $32 million…CLICK HERE TO READ THE FULL STORY AT BREWBOUND
