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BrewDog sells 22 percent stake to private equity firm

The sale sets the Scottish brewery’s value at roughly $1 billion.
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brewdog.com

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In a letter to “Equity Punk” crowdfunding investors sent Saturday, BrewDog co-founder James Watt announced that the Scotland-based brewery and bar chain had sold a 22 percent stake to TSG Consumer Partners, a San Francisco-based private equity firm that also has interests in Pabst Brewing Co. and Sweetwater Brewing Co.

According to the letter, TSG acquired its stake for £213 million, £100 million of which will be invested in the future of the business. The remainder will go toward shareholder liquidity, making multimillionaires of BrewDog founders James Watt and Martin Dickie and giving those who invested in the brewery through its crowdfunding campaigns the chance to sell up to 15 percent of their shares at vastly increased value. Those who invested in the company’s fourth round of funding last year have seen the value of their shares increase by 177 percent, according to the letter, and shares from the first investment round, which closed in February 2010, are now worth 2,800 percent of their original value, which is about the ROI you’d get from an actual money tree. (Investors who choose not to sell their shares will get a voucher for six cans of the brewery’s upcoming Vermont-style IPA at any BrewDog bar, the letter said.)

The sale puts BrewDog’s total value at more than $1 billion, a valuation for a craft brewery not seen since Constellation Brands purchased San Diego-based Ballast Point Brewing Co. for the same amount in 2015. It also indicates a stark change in rhetoric for BrewDog, which has been famously anti-establishment and specifically scornful of forms of funding like private equity in messaging about its crowdfunding campaigns:

“No fat cats. No investment bankers. No venture capitalists. No overbearing parent company. Just loads of people who care passionately about great craft beer. We love the fact that our little company is owned by people who love our beers as much as we do.” tweet

Nevertheless, the sale will likely help BrewDog continue on its path of world domination. Watt told U.K.-based business newspaper City A.M. that the move supported ambitions to take the company public in the next four to five years. In the meantime, the cash will be used toward increasing brewing capacity in BrewDog’s production facilities in Scotland and Columbus, Ohio, as well as toward building new breweries in Asia and Australia.

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