Constellation Brands’ $5 Billion CAD ($4 Billion USD) Investment in
Canopy Growth Closes Following Shareholder and Canadian Government
Approval
Constellation Brands, Inc. (Constellation) (NYSE: STZ and STZ.B)
and Canopy Growth Corporation (Canopy Growth or the Company) (TSX:
WEED, NYSE: CGC) today announced the closing of Constellation’s
$5 billion CAD ($4 billion USD) investment in
Canopy Growth, which was previously announced on August 15,
2018. The transaction was approved by an overwhelming majority of
Canopy Growth shareholders and has been granted all required
regulatory approvals, including by the Canadian government under
the Investment Canada Act.
This investment provides Canopy Growth with significant funding
needed to build scale in the more than 30 countries currently
pursuing federally permissible medical cannabis programs, while
establishing the foundation needed to supply new recreational
adult-use markets as cannabis becomes legal in markets around the
world.
“We’re excited to expand our strategic partnership with Canopy
Growth and to begin helping them build the global scale needed to
win long-term,” said Rob Sands, chief executive officer,
Constellation Brands. “The global cannabis market presents a
significant growth opportunity and Canopy Growth is well-positioned
to establish a strong leadership position in this fast-evolving
category.”
With this investment, Constellation Brands increases its
ownership interest in Canopy Growth to approximately 37 percent of
outstanding common shares of Canopy Growth and has appointed two
members of its executive team, as well as two independent
directors, to the Board of Directors of Canopy Growth.
Constellation estimates the interest expense associated with this
transaction to approximate $55 million before tax with an
approximate $0.25 impact on fiscal 2019 comparable basis EPS
results. Constellation also continues to evaluate the potential
equity in earnings impact from the Canopy Growth investment and
related items.
“Our cash position opens up a world of opportunity for us,” said
Bruce Linton, chairman and co-chief executive officer, Canopy
Growth. “Relative to our valuation, we have never been in a
better position to create shareholder value. This investment was a
landmark moment for the entire sector when it was announced. Now
that the capital is Canopy’s to deploy, we’re going to quickly get
to work increasing our lead by adding strategic assets around the
world.”
As previously announced, the transaction includes a
restructuring of Canopy Growth’s Board of Directors. Canopy Growth
management wishes to thank Chris Schnarr and
Murray Goldman for their contributions to the company.
Mr. Schnarr and Mr. Goldman sat on the Board as it
oversaw a transformative period for Canopy Growth from a small
start-up to a global, diversified industry leader. Mr. Schnarr
will continue with Canopy Growth and transition into a senior
leadership role overseeing medical and therapeutic research
commercialization. Subsequently, Canopy Growth management welcomes
Constellation’s President and Chief Operating Officer
Bill Newlands and Executive Vice President and Chief Financial
Officer David Klein, as well as current Constellation Board
Members Judy Schmeling, former HSNi LLC chief operating
officer, and Robert Hanson, chief executive officer of John
Hardy Global Limited, to the Canopy Growth Board. Their leadership
and experience will be invaluable as Canopy Growth continues to
grow around the world.
About Constellation BrandsConstellation Brands
(NYSE: STZ and STZ.B), a Fortune 500® company, is a leading
international producer and marketer of beer, wine and spirits with
operations in the U.S., Mexico, New Zealand, Italy and Canada.
Constellation is the No. 3 beer company in the U.S. with high-end,
iconic imported brands such as Corona Extra, Corona Light, Modelo
Especial, Modelo Negra and Pacifico. The company’s beer portfolio
also includes Ballast Point, one of the most awarded craft brewers
in the U.S., and Funky Buddha Brewery. In addition, Constellation
is the world leader in premium wine, selling great brands that
people love, including Robert Mondavi, Clos du Bois, Kim Crawford,
Meiomi, Mark West, Black Box, Ruffino and The Prisoner. The
company’s premium spirits brands include SVEDKA Vodka, Casa Noble
Tequila and High West Whiskey.
Based in Victor, N.Y., the company believes that industry
leadership involves a commitment to brand building, our trade
partners, the environment, our investors and to consumers around
the world who choose our products when celebrating big moments or
enjoying quiet ones. Founded in 1945, Constellation has grown to
become a significant player in the beverage alcohol industry with
more than 100 brands in its portfolio; about 40 wineries, breweries
and distilleries; and approximately 10,000 talented employees. We
express our company vision: to elevate life with every glass
raised. To learn more, follow us on Twitter @cbrands and visit
www.cbrands.com.
About Canopy Growth CorporationCanopy Growth
(TSX: WEED) (NYSE: CGC) is a world-leading diversified cannabis and
hemp company, offering distinct brands and curated cannabis
varieties in dried, oil and Softgel capsule forms. From product and
process innovation to market execution, Canopy Growth is driven by
a passion for leadership and a commitment to building a world-class
cannabis company one product, site and country at a time. The
Company has operations in 12 countries across five continents. The
Company is proudly dedicated to educating healthcare practitioners,
conducting robust clinical research, and furthering the public's
understanding of cannabis, and through its wholly owned subsidiary,
Canopy Health Innovations, has devoted millions of dollars toward
cutting edge, commercializable research and IP development. Through
partly owned subsidiary Canopy Rivers Corporation, the Company is
providing resources and investment to new market entrants and
building a portfolio of stable investments in the sector. From our
historic public listing on the Toronto Stock Exchange and New York
Stock Exchange to our continued international expansion, pride in
advancing shareholder value through leadership is engrained in all
we do at Canopy Growth. Canopy Growth has established partnerships
with leading sector names including cannabis icon Snoop Dogg,
breeding legends DNA Genetics and Green House seeds, and Fortune
500 alcohol leader Constellation Brands, to name but a few. Canopy
Growth operates ten licensed cannabis production sites with over
4.3 million square feet of production capacity, including over
500,000 square feet of GMP certified production space. For more
information visit www.canopygrowth.com.
Forward-Looking StatementsThis news release
contains forward‐looking statements. All statements other than
statements of historical fact are forward‐looking statements. The
words “expect,” “intend” and similar expressions are intended to
identify forward‐looking statements, although not all
forward‐looking statements contain such identifying words. These
statements may relate to business strategy, future operations and
growth, prospects, plans and objectives of management, as well as
information concerning expected actions of third parties. All
forward‐looking statements involve risks and uncertainties that
could cause actual results to differ materially from those set
forth in, or implied by, such forward‐looking statements. The
forward‐looking statements are based on management's current
expectations and should not be construed in any manner as a
guarantee that such results will in fact occur. Examples of such
statements include but are not limited to those related to the
anticipated use of proceeds, future expansion and growth, future
success, the realization of Canopy Growth’s long‐term strategic
vision, the creation of shareholder value, and estimated interest
expense and its impact on EPS results. All forward‐looking
statements speak only as of the date of this news release and
neither Constellation Brands nor Canopy Growth undertakes any
obligation to update or revise any forward‐looking statements,
whether as a result of new information, future events or otherwise.
In addition to risks and uncertainties associated with ordinary
business operations, the forward‐looking statements contained in
this news release are subject to risks and other factors and
uncertainties, including that the expected impact and benefits of
the transaction may not materialize in the manner expected, or at
all; circumstances may warrant that Canopy Growth use the proceeds
from the transaction for different purposes than stated above; and
other factors and uncertainties disclosed from time‐to‐time in
Constellation’s filings with the Securities and Exchange
Commission, including its Annual Report on Form 10‐K for the fiscal
year ended February 28, 2018 and its Quarterly Report on Form
10‐Q for the fiscal quarter ended August 31, 2018, or in
Canopy Growth’s filings with the Canadian Securities Administration
or with the United States Securities and Exchange Commission,
including its annual information form dated June 28, 2018,
which could cause actual future performance to differ from current
expectations.
CONTACTS:Michael
McGrew, Constellation Brands, Media (773)
251-4934Patty Yahn-Urlaub, Constellation Brands,
Investor Relations (585) 678-7483Jordan Sinclair,
Canopy Growth, Media (613) 769-4196Tyler Burns,
Canopy Growth, Investor Relations (855) 558-9333 ext. 122