Craft beer producer BrewDog has sold about a fifth of the business to an American private equity firm in a deal valuing it at about £1 billion, which will take it “to the next level” amid reported plans foran IPO in the next five years.
The brewer, based in Aberdeenshire’s Ellon and founded in 2007 by James Watt and Martin Dickie, said TSG Consumer Partners has bought a stake of about 22 per cent, with the transaction aiming to deliver long-term capital with a ten-year timescale. It also entails £100 million to fund BrewDog’s continued global growth, and further proceeds for early shareholder liquidity.
It has been reported that combined with San Francisco-based TSG’s spend on buying stock from existing backers, the deal amounts to £213m, with Watt and Dickie to receive up to £100m. Watt was also quoted as saying the transaction backs the brewer’s plans to go public within four to five years.
He was unavailable for comment but in a statement on the deal said: “Martin and I still remain controlling shareholders and fully committed to BrewDog, and this investment will allow us to accelerate our mission.”
BrewDog has raised £26m in four rounds of crowdfunding and said all of its “equity punk” shareholders have “overwhelmingly” approved the deal.
The brewer said: “At a £1bn valuation, shares purchased in Equity for Punks I, which closed in February 2010, are now worth 2,765 per cent of their original value. Even craft beer fans that invested in Equity for Punks IV, which closed in April 2016, have seen the value of their shareholding increase by 177 per cent in just one year.”
BrewDog’s growth has dovetailed with the craft beer phenomenon, and Watt said the firm is growing “mega-fast”, expecting the pace to accelerate further this year.
After being founded in Dickie’s mother’s garage, BrewDog exports to 55 countries and last year saw a 60.6 per cent surge in revenues to £71.9m. It recently said it is looking at opening a brewery in Asia to tap into surging demand in the Far East and has invested in a new brewery in Columbus, Ohio.
Watt said: “We recently shared our ambitious five-year plan with our equity punk shareholders, which included adding more capacity in Ellon and Columbus as well as building new breweries in Asia and Australia. This deal will enable us to take our business, and our community’s investment in BrewDog, to the next level.”
Blythe Jack, MD at TSG, which has invested in global brands including Vitamin- water and Popchips, said: “BrewDog is an ideal fit for TSG’s mission, which is to partner with visionary founders building next-generation consumer brands.”
Watt added that the partnership with TSG is “a validation of our crowdfunding model. Crowdfunding can no longer be viewed as alternative finance; this is the democratisation of finance.”