* Exploring IPO for part of its Canadian wine business
* Expects FY profit of $6.05-$6.35/share vs est $6.11
* To buy The Prisoner Wine Company's portfolio of brands
* Shares rise as much as 4.88, touch record high
(Adds analyst comment; updates shares)
By Subrat Patnaik
April 6 (Reuters) - Constellation Brands Inc (NYSE:STZ) STZ.N said on
Wednesday it was considering taking a part of its Canadian wine
business public and reported better-than-expected quarterly net
sales, helped by strong demand for its premium Corona and Modelo
beers.
Shares of the company, which forecast full-year profit
largely above estimates, rose as much as 4.88 percent to a
record high of $158.75 in early morning trading.
Chief Executive Rob Sands said the full value of the
Canadian wine business, which delivered "excellent overall
financial results" in 2016, was not being recognized.
Sands said an IPO would create better visibility and that
the company expected to take a final decision later this year.
Constellation produces the Jackson-Triggs and Inniskillin
wine brands in Canada, where it operated eight wineries as of
February last year.
The company is trying to separate the consistently growing
Canadian wine business from its counterpart in the United
States, CLSA analyst Caroline Levy told Reuters.
An increase in the Hispanic population in the United States
has spurred demand for Modelo Especial and Corona, premium
Mexican beer brands which have also won over other American
consumers.
Net income attributable to the company rose 13.4 percent to
$243.4 million, or $1.19 in the fourth quarter ended Feb. 29,
beating average analysts estimates of $1.14, according to
Thomson Reuters I/B/E/S.
Net sales rose 13.8 percent to $1.54 billion, topping
estimates of $1.52 billion.
Constellation said it would acquire The Prisoner Wine
Company's portfolio of brands for about $285 million in cash
from Huneeus Vintners, a fine wine company.
The deal is expected to close by the end of April and add
about $0.03 to $0.05 to earnings per share in the year ending
February 2017.
Constellation is paying a lot for acquisitions to add
premium brands, Levy said.
"The consumer is moving upscale, the consumer wants
specialtly and premium brands."
The company also forecast earnings of $6.05-$6.35 per share
for the year, largely above analysts' average expectation of
$6.11.