Constellation Brands (STZ), owner of Model Especial and Corona Extra, has acquired Craft Brewery Ballast Point in a $1 billion deal.
Constellation shares were up 2% to trade at $137.95 after the announcement of the acquisition. The 52-week high for the stock is $138.88.
The acquisition is the latest in a trend of major beer company’s purchasing small craft breweries in high-priced deals to take advantage of the rapidly-growing craft beer industry.
Constellation owns several beer and wine brands, including Corona Light, Corona Extra, Modelo Especial, Pacifico, Negra Modelo, Ruffino, Clos du Bois and Franciscan Estate. The company’s premium brands include Black Velvet Canadian Whiskey and SVEDKA Vodka.
Ballast Point sells its beer in over 30 stores, and is expected to sell roughly 4 million cases of beer this year to reach sales of approximately $115 million.
The deal will be financed through debt and cash, and is expected to close by the end of the year.
According to the Brewers Association, craft beer sales grew an outstanding 18% last year. In 2014, over 22 million barrels of craft beer were produced. In 2008, only 8.5 million barrels were being produced.
Constellation is in the first major beer company to purchase a small craft beer company. In January, AB InBev (BUD) acquired the Seattle craft brewing company Elysian Brewing. Previously, the brand purchased other craft beer brands out of Oregon and Chicago.