The USA’s third largest brewery owner has announced it has signed a deal to sell-off Ballast Point Brewery to a relatively unknown company, Chicago-based Kings & Convicts Brewing Company.

While the financial terms of the deal have not been disclosed, according to Bloomberg, Constellation had written down the brand multiple times, citing increased competition, most recently estimating the trademark’s fair value at $17 million in an October quarterly filing, down from $223 million in early 2017.

Four-years ago it seemed like such a good idea when Constellation Brands bought San Diego’s Ballast Point Brewery for $1 billion dollars.

Although many in the craft beer industry screamed “sell-out” at Ballast Point’s founder Jack White, a cheque with a number one followed by nine zeros is a figure few would pass on.

For Constellation the deal seemed like a ‘no-brainer’. Buying Ballast Point gave Constellation a quick entry into the craft beer industry. However, things did not go as planned through a combination of factors. These range from increased competition in the craft beer industry, younger beer drinkers moving on to hard seltzers, a move towards “buying local”, and to what some claim was poor management by Constellation.

“Trends in the U.S. craft beer segment have shifted dramatically since our acquisition of Ballast Point,” said Bill Newlands, Constellation Brands president and chief executive officer. “Ballast Point remains one of the most iconic craft beer brands in the country and we’re pleased to transition the business to an owner that can devote the resources needed to fuel its future success. At the same time, this decision allows Constellation to focus more fully on maximizing growth for our high-performing import portfolio and upcoming new product introductions, including Corona Hard Seltzer, scheduled to launch this spring.”

“We’re excited to welcome the team at Ballast Point into the Kings & Convicts family,” said Brendan Watters, Kings & Convicts’ chief executive officer. “We have long admired the quality and spirit of Ballast Point’s brands and team. Ballast Point’s best-in-class brewing standards will remain unchanged, delivering the same high-quality, award-winning products the company has become known for over the years. Our goal is to leverage Ballast Point’s deep know-how, talented and passionate employee base, and outstanding operating team to grow both Ballast Point and Kings & Convicts together.”

As part of this agreement, Kings & Convicts will retain all positions within Ballast Point’s 560-person existing workforce, with plans to hire additional resources to support the future growth of the business.

Kings & Convicts started brewing for the public in Highwood, Illinois in 2017. Conceived by an Englishman and an Australian, Kings & Convicts was built “on the freedom of anti-authority and the spirit of fellowship”.