USA – Constellation Brands has entered into an agreement to sell Black Velvet Canadian Whisky to US distilled spirits supplier Heaven Hill Brands for approximately US$266 million.

The transaction, which is subject to regulatory approvals, will also see Constellation offload the brand’s associated production facility in Lethbridge, Alberta, Canada, along with a subset of Canadian whisky brands produced at that facility.

The net sales for the brands included in the transaction totalled US$67 million during Constellation’s fiscal year 2019. It is expected the transaction will close in the second half of 2019.

Commenting on the deal, Constellation Brands president and chief executive said: “We are relentlessly focused on the consumer and building a portfolio of brands consumers love today, while pushing beyond to meet their evolving needs well into the future.

“This decision aligns with our consumer-led premiumisation strategy to deliver accelerated growth and shareholder value as we continue to focus our wine and spirits portfolio on higher-end, fast-growing brands.

“For Heaven Hill, Black Velvet is a historic, well-known, and high-volume brand that complements their broad distilled spirits portfolio and aligns with their business strategy.”

Heaven Hill said the move will reposition its distilled spirits portfolio by substantially expanding sales activities in the imported whisky category

Heaven noted that the brand complements its portfolio of brands such as Evan Williams Bourbon, Burnett’s Vodka, Deep Eddy Vodka, Admiral Nelson’s Rums and Christian Brothers Brandies.

“We are excited to add Black Velvet to our iconic group of brands and look forward to growing this historic brand in the months and years ahead,” said Max Shapira, president of Heaven Hill Brands.

“As we continue to build our business based on strategic acquisitions and innovation, Heaven Hill’s commitment to quality continues to steer the positive outlook for our diverse portfolio.”

Constellation has a strong portfolio of spirits brands including SVEDKA Vodka, High West Whiskey, Casa Noble Tequila, Mi CAMPO Tequila, and Nelson’s Green Brier.

Constellation, through its investment venture initiative Focus on Female Founders, made minority investments in higher-end, distinctive spirits brands such as Austin Cocktails, Bardstown Bourbon Company, El Silencio, The Real McCoy.

The New York based company has also expanded with the most recent acquisition of minority stake in Colorado-based craft rum maker Montanya Distillers.