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Healdsburg group to pay Constellation up to $234 million for wine brands

GEYSER PEAK, BUENA VISTA, GARY FARRELL AMONG CALIFORNIA, PACIFIC NORTHWEST BRANDS TOTALING 1 MILLION CASES OF WINE PRODUCED IN 2007

NORTH COAST, June 10, 2008 – Global spirits and wine giant Constellation Brands Inc. (NYSE: STZ) today said it sold several North Coast and Pacific Northwest brands, including Geyser Peak in Geyserville and others acquired in December from Fortune Brands, to a new Healdsburg-based partnership for $209 million in cash plus as much as $25 million more based on brand performance.

The buyer was Eight Estates Fine Wines LLC, doing business as Ascentia Wine Estates, led by Jim DeBonis, former COO of the Healdsburg-based Beam Wine Estates wine group Fortune sold to Constellation Brands in December. He is CEO of the new company, and former Wine.com CEO Peter Ekman is chief sales and marketing officer.

The other members of Ascentia are White Plains, N.Y.-based W.J. Deutsch & Sons, a wine marketing company behind the original "critter label" Yellow Tail from Australia, and San Francisco private-equity firm GESD Capital Partners. W.J. Deutsch will be sales and marketing agent for the Ascentia portfolio.

Other companies in GESD's portfolio include Andre Boudin Bakeries, Go Roma Italian Kitchens and Milton's Fine Foods LLC.

Brands included in the sale are Geyser Peak, Buena Vista and Gary Farrell in Sonoma County; Atlas Peak in Napa County; Ste. Chapelle in Idaho; and Covey Run and Columbia Winery in Washington. Case production for all the brands totaled 1 million last year.

Constellation reportedly has been courting buyers for these brands since just after purchasing them in a portfolio deal with Fortune Brands that garnered Constellation brands such as Clos Du Bois in Sonoma County.

"Sale of these assets will aid in streamlining Constellation's U.S. wine portfolio by eliminating brand duplication and excess production capacity," said President and CEO Rob Sands in a statement.

The company expects to record a $23 million pretax loss with the sale, largely from writing off goodwill. Constellation plans to use the proceeds of the sale to pay down debt.

International Wine Associates of Healdsburg advised Constellation Brands in the sale.