Constellation Brands sells wine assets

Constellation Brands sells wine assets for $209 million in cash, updates 2009 profit guidance
NEW YORK (Associated Press) - Wine company Constellation Brands Inc. said Tuesday it sold certain U.S. wine assets to Eight Estates Fine Wines LLC for $209 million in cash.

The company said it could receive up to another $25 million if certain objectives are achieved by Eight Estates, which is also known as Ascentia Wine Estates.

Assets from Geyser Peak, Buena Vista, Gary Farrell, Atlas Peak, XYZin, Columbia Winery, Covey Run and Ste. Chapelle were included in the sale.

The company said those brands represent about one million cases of wine sold in 2007.

Constellation Brands said selling the assets will eliminate "brand duplication and excess production capacity."

The company said it will use the proceeds from the sale to reduce its borrowings.

The company also said it will record a pretax loss of about $23 million, or 8 cents per share, in fiscal 2009 related to the sale.

The company now expects to earn between $1.38 and $1.46 per share for the year, or $1.68 to $1.76 per share excluding the loss from the sale and other charges.

Analysts polled by Thomson Financial expect profit of $1.70 per share for the year. Analyst estimates typically exclude one-time costs and charges.