Constellation Brands sets Thursday launch for $1.3 billion in term loan debt

By Sara Rosenberg

New York, May 8 - Constellation Brands Inc. has scheduled a bank meeting for Thursday to launch its proposed $1.3 billion in term loan debt (Ba2/BB), according to a market source.

JPMorgan is the lead bank on the deal.

The debt is comprised of a $400 million term loan A add-on and a $900 million term loan C, the source said.

Proceeds will be used to help fund the acquisition of Vincor International for C$36.50 per share.

The transaction is valued at C$1.52 billion, which includes C$1.27 billion of equity, based on Vincor's 34.8 million shares outstanding on a fully diluted basis, and the assumption of about C$250 million of Vincor's net debt as of Dec. 31.

Closing is targeted for June 5, subject to customary regulatory approvals and other closing conditions.

Last year, Constellation commenced a cash takeover bid for Vincor at C$31.00 per share, which was later upped to C$33.00 per share before being dismissed altogether.

To fund the takeover bid, Constellation had come to market with a $1.2 billion credit facility, consisting of a $300 million term loan A talked at Libor plus 150 basis points and a $900 million term loan C talked at Libor plus 175 bps that was being led by JPMorgan and Citigroup. This deal had to be pulled in December when the takeover bid failed.

Constellation is a Fairport, N.Y., producer and marketer of beverage alcohol brands. Vincor is a Mississauga, Ont., wine company.

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