Constellation Brands pays $1 billion for San Diego craft brewer Ballast Point Brewing

New York wine and spirits giant Constellation Brands is entering the craft brewing industry, announcing a deal Monday to purchase San Diego beer maker Ballast Point Brewing & Spirits for $1 billion.

While Constellation already owns a lucrative portfolio of imported beers, the deal will give it one of the fastest-growing brewers in the country. Ballast Point is on pace to sell nearly 4 million cases this year, more than double the amount from a year ago, and expects to ring up $115 million in net sales.

Craft brewers have doubled their share of the U.S. beer market over the past five years, noted Rob Sands, CEO of Constellation Brands.

“Ballast Point has certainly been a key driver of that growth. Their business philosophy and entrepreneurial spirit perfectly align with our culture and we look forward to strengthening our position in the high-end beer segment with what is arguably the most premium major brand in the entire craft beer business,” Sands said in a statement.

It is the latest in a flurry of deals that are shaking up the craft brewing industry. In September, Heineken purchased a 50 percent stake in Lagunitas Brewing Co. in a deal that likely valued the Petaluma company at around $1 billion.

That same month, MillerCoors agreed to buy Saint Archer Brewing Co. in San Diego and AB InBev agreed to purchase Los Angeles-based Golden Road Brewing in Los Angeles.

Founded in 1996, Ballast Point produces 15 beers year-round - led by its popular Sculpin India pale ale and Grapefruit Sculpin IPA - and 30 seasonal or limited release beers.

“We started this business nearly 20 years ago with a vision to produce great beer that consumers love and to do it the right way,” Ballast Point founder Jack White said in a statement. “To achieve that vision, we needed to find the right partner. ”

Ballast Point will continue to operate as a standalone company with its existing management team and employees running the day-to-day operations. It employs more than 500 people and sells its beer in more than 30 states.

The deal is expected to close by the end of the year. Constellation said it would finance the transaction with cash and debt. It expects the acquisition will add 5 to 6 cents per share to earnings in fiscal 2017.

Constellation made a splash in the beer sector in 2013 when it purchased Grupo Modelo’s U.S. beer business from Anheuser-Busch InBev for $4.75 billion, giving it access to the Corona, Modelo and Pacifico brands from Mexico and Tsingtao from China. Today, it is the third-largest beer company in the U.S.

Constellation is the third-largest company in the U.S. wine business. Locally, its brands include Robert Mondavi, Clos du Bois, Ravenswood, Simi, Mark West and Meiomi.