Constellation Brands Inc. announced today an agreement to acquire San Diego-based Ballast Point Brewing&Spirits for approximately $1 billion. Although pro forma debt to EBITDA for this transaction will be just over 4x, delaying the company's ongoing deleveraging trajectory, we believe the company will improve leverage closer to 3.5x over the next 18 to 24 months, absent additional acquisitions. We are affirming the ratings on the company, including the 'BB+' corporate credit rating, in part reflecting our belief that the company will reduce leverage. We have also factored into the ratings both the possibility that future acquisitions could still lead to higher leverage, and the company's commitment to increase manufacturing capacity leading to negative discretionary cash flow. The outlook
