$1 billion

[The Judge]

Wowzers... Home brewery turned craft brewery Ballast Point sold to Corona for $1 billion.

http://www.latimes.com/business/la-fi-ballast-point-beer-deal-20151116-story.html

 

[NewtownClown]

Not sold to Corona. Sold to Constellation Brands Inc, a company with a license to import Corona...

 

[big78sam]

Well if the beer stays the same and it makes it easier for us to get Ballast Point in Australia I'm happy. It's a great beer.

 

[madpierre06]

'Twas also in a little co-product placement alongside Sierra Nevada on new episode of Big Bang Theory a few weeks ago. Usually see it in BWS.

Quoted from the article...

Constellation said it would allow San Diego’s biggest brewery and its 500 employees to operate autonomously. That’s important for acquired craft brands, which have had to combat the perception they were “selling out” to giant corporations.

 

[droid]

a bill' ?... pfft

 

[The Judge]

Yeah it's great news for us in Oz. I just can't believe a Dr Evil sized offer was made on it.

 

[indica86]

Holy **** balls batman

 

[idzy]

a bill' ?... pfft

tell him he's dreamin'

 

[spog]

Holy **** balls batman

+ 1.

 

[Samuel Adams]

Hopefully the quality stays the same and the distribution increases.
I love Sculpin IPA but I had to pay $10 for a stubbie takeaway, would be nice to get it a bit cheaper.

 

[wide eyed and legless]

Hopefully the quality stays the same and the distribution increases.
I love Sculpin IPA but I had to pay $10 for a stubbie takeaway, would be nice to get it a bit cheaper.

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I can't see it getting cheaper, they have a $1 Billion hole to fill, BPB $51.7 million net revenue in the first 6 months of this financial year translating to a $6 million net profit, CBI must be confident they can do better.

 

[yankinoz]

I'm gobsmacked. Business news site Bloomberg predicted before the sale that Ballast Point's 2015 sales volume would grow to 4 million cases (slabs), double 2014's. Even if the brewer averages US $15 net profit per case, a very generous assumption, it would take 17 years to repay the purchase, well over 20 if discounting is figured in.

So I'll conclude that Constellation feels the brand name is worth more than all but a few US craft brew brands, and expects to make a major expansion, brewing somewhere. They mean to grab space.

On a recent revisit to the US after 5 years away, I was gladdened to see how many pubs (in NYC, Woodstock, New Jersey and Iowa City, Iowa) carried on tap and in bottles a range of brands that are still independent of the conglomerates, but the war for shelf and tap space will continue.

 

[yum beer]

How do you stop craft beer from taking % of beer sales....easy buy em out.

Doing it for the craft, for the beer, down with mega swill......eerrrr how much, hang head, accept cheque, walk away back turned not giving a ****.

 

[The Judge]

Maybe there's plans to expand by opening overseas breweries, the way a lot of larger breweries do. Might end up seeing "brewed and bottled in Geelong" on their labeling.

 

[kaiserben]

I'm gobsmacked. Business news site Bloomberg predicted before the sale that Ballast Point's 2015 sales volume would grow to 4 million cases (slabs), double 2014's. Even if the brewer averages US $15 net profit per case, a very generous assumption, it would take 17 years to repay the purchase, well over 20 if discounting is figured in.

They don't need to recoup the purchase price. Ballast Point itself is an asset.

Just say Ballast Point's current value of $1b was still $1bn in 17-20+ years time, then Constellation will have made ~$1bn in profits, but still have the asset which they could sell (for another $1bn).

The only way this is a bad decision for Constellation is if the value of the Ballast Point brand falls dramatically and/or starts operating at a loss.

 

[spog]

$ 1 billion in 17-20 yrs time would be considerably less than now, but a huge right off tax wise......win,win.

 

[Moad]

I'm sure all craft breweries start off with good intentions of control over their product and lifestyle while sticking a finger up to the big boys. In the end, it is a business. 1 billion I would not even think twice about selling out and I would be very surprised if anyone disagreed if they found themselves in that situation. I just wish they were honest about it when it happened. F**k autonomy and maintaining control, take your 1 bil and travel the world.

 

[indica86]

..eerrrr how much, hang head, accept cheque, walk away back turned not giving a ****.

Take my mother too cunny...

 

[wide eyed and legless]

They don't need to recoup the purchase price. Ballast Point itself is an asset.

Just say Ballast Point's current value of $1b was still $1bn in 17-20+ years time, then Constellation will have made ~$1bn in profits, but still have the asset which they could sell (for another $1bn).

The only way this is a bad decision for Constellation is if the value of the Ballast Point brand falls dramatically and/or starts operating at a loss.

Ballast Point is an asset but is it a $billion asset? It isn't as simple as getting a wallet out and handing over a $billion there will be borrowings and interest to pay, doubling the sales from 2014 to 2015 is a major accomplishment and as yankinoz suggests Constellation will be making large investments into Ballast Point, or getting it brewed elsewhere to get it up to the volume of sales which they will need to get for a return on a $billion investment.

 

[kaiserben]

Well yeah. Obviously. My point is they don't need to re-coup $1b in profit to break even.