Constellation Brands teams up with ‘Breaking Bad’ stars Cranston and Paul

By: Wajeeh Khan
Wajeeh Khan
Wajeeh is an active follower of world affairs, technology, an avid reader, and loves to play table tennis in… read more.
on Jun 17, 2021
  • Constellation Brands took a minority stake in Breaking Bad stars' mezcal brand.
  • Cranston and Paul's Dos Hombres will remain independently owned after the deal.
  • Constellation Brands shares are currently over 1% down on the intraday chart.

Constellation Brands Inc (NYSE: STZ) made headlines on Thursday as it took a minority stake in Aaron Paul and Bryan Cranston’s mezcal brand, Dos Hombres. The news comes more than a month after the Fortune 500 company reported a decline in its net income in the fiscal fourth quarter.

Diageo plc has made two similar acquisitions in recent years

In recent years, beverage companies have been taking a special interest in alcoholic brands backed by celebrities. Part of the reason could be that celebrities-started alcoholic brands usually see higher demand and, consequently, greater revenue.

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Constellation’s British peer, Diageo plc, has made two similar acquisitions in recent years for more than $1.6 billion (£1.15 billion). It bought George Clooney’s Tequila brand, Casamigos, in 2017 and Ryan Reynolds’ Aviation Gin last year.

The Breaking Bad stars launched Dos Hombres in 2019. The financial terms of the transaction between the Corona brewer and the mezcal brand were not disclosed. Dos Hombres is independently owned at the moment and will remain so after the deal.

In separate news from the United States, medical equipment maker Danaher Corp said on Thursday it will buy the biotech firm Aldevron for $9.6 billion in cash.

Vice President Jennifer Evan’s remarks

According to Constellation Brands, it used its venture capital arm to invest in Dos Hombres. Commenting on the news, Constellation Ventures’ Vice President Jennifer Evans said:

“Our goal is to make strategic, minority investments in high potential brands in growing categories, and the U.S. mezcal market continues to show great potential. We’re excited to further invest in the category with a great team and brand that we feel has a low of growth runway.”

As per the data from International Wine and Spirit Research (IWSR), the mezcal category noted a growth of 14% in 2020. The ultra-premium category that includes Dos Hombres, the data further suggests, is the most rapidly growing segments. Dos Hombres 750-millilitre bottle is priced at $65.

Constellation Brands is currently more than 1% down on the intraday chart. The stock is exchanging hands at $230 per share. In comparison, the NYSE-listed company had started the year at $217 per share and had slipped to a low of $211 per share in the last week of January.

At the time of writing, the Victor-headquartered company is valued at $44.41 billion and has a price to earnings ratio of 25.22.

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