Constellation Brands to obtain up to $2 billion bank debt for BRL acquisition

By Sara Rosenberg

New York, Jan. 21 - Constellation Brands Inc. has received commitments for up to $2 billion in bank debt from JPMorgan, Salomon Smith Barney and UBS Warburg, according to a company spokesman. The new credit facility will be used to help fund the acquisition of BRL Hardy Ltd. for approximately $1.4 billion.

The credit facility will consist of $1.2 billion in term loans and a $400 million revolver. There is also a $400 million bridge loan that is available to the company if necessary, the spokesman explained. Most of the facility matures in five years, with a small piece due in six years, the spokesman added.

As part of the acquisition, Constellation has offered shareholders of BRL Hardy A$10.50 per share, valuing BRL Hardy's total shares at approximately $1.1 billion and will assume around $325 million in net debt. BRL Hardy shareholders will be offered a choice of all cash, all stock or a combination.

The transaction is subject to approval of BRL Hardy's shareholders and customary closing conditions, and is expected to close in early April 2003, according to a news release.

At closing, assuming that BRL Hardy shareholders choose to take the maximum of 15 million Constellation shares, pro forma last 12 months net debt to EBITDA will be approximately 4.0 times, and pro forma EBITDA interest coverage will be approximately 3.7 times.

Constellation is a Fairport, N.Y. producer and marketer of alcoholic beverages. BRL Hardy is an Australian wine producer.

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