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Spanish brewer Mahou San Miguel has reached an agreement to acquire a majority stake in Founders Brewing Co., Michigan, according to a report from MiBiz.com.
Mahou already owned 30% of the burgeoning brewery based in Grand Rapids following a 2014 transaction valued at more than $ 96 million. The company will now hold 90% of the founders following the latest transaction, which is expected to be finalized in January, MiBiz said, citing a document filed last week with the Michigan Liquor Control Commission. Founders Mike Stevens and Dave Engbers, co-founders of Brewing, will each hold 5% of the company.
The last transaction will buy more than two dozen minority shareholders.
"To see the type of return on the dollar that they can enjoy, it 's really very satisfying and rewarding, coming from a place of a few homebrewers – and quite frankly, I was there. opposite of wealth, "said Stevens MiBiz. "It's the American dream."
Stevens did not answer a call to comment.
MiBiz, citing a request from the Freedom of Information Act, said that as part of the 2014 transaction, Mahou had the option to buy the rest of the founders at the 5-year anniversary of the transaction for a price between 10 and 13 times the EBITDA. However, the chief legal adviser to the founders, Tony Barnes, told the press that "the old agreement was gone" and that the new agreement was a separate arrangement.
The latest transaction comes as sales of Founders Brewing products at the portfolio level, in dollars, increased 12.8% to $ 71.6 million and volume sales increased 12% until August 11, according to the IRI market research firm. However, sales in dollars (3.6%) and volume (3.3%) slowed during single digit growth in the last four weeks.
The largest increase in off-site dollar sales growth is Founders' flagship offering, All Day IPA, this year's sixth-best-selling bestseller craft beer. Sales of the brand rose 11.1 percent to nearly $ 43 million, while volume sales rose 10.8 percent to date, IRI reported. However, dollar sales every day (4.3%) and volume sales (3.9%) both slowed to single digit growth over the last four weeks as well.
Compare these figures to 2018, when the founders produced 563,179 barrels of beer, according to the Brewers Association. Dollar sales of the founders' portfolios increased by 32.4% and volume sales by 37.8% in 2018, reported IRI. All Day IPA saw off-site dollar sales growth of 31.4%, while volume sales increased 32.1% in 2018.
Stevens told MiBiz that the takeover of Mahou in Founders will help it deal with difficulties such as slowing growth in the sector, while helping the company to "reinvent the appearance of beer "for a new generation of consumers.
"We really have to start looking beyond craft and this industry," he said. "We are starting to see a slowdown, but there are so many opportunities when you really start to look at and evaluate the beer industry. Eighty percent of the public who drinks beer does not drink crafts. What does it mean? It means there is an ocean of possibilities. This opportunity will require a lot of resources, more resources than any of our craft breweries. We are examining this opportunity with Mahou as our common opportunity to penetrate into a much larger segment of the beer industry. "
Earlier this year, Mahou teamed with Founders to acquire a 40% stake in Boulder, Colorado's Avery Brewing, of which Mahou already held 30% of the shares following an agreement reached in 2018 As part of this acquisition, the founders transferred a portion of All Day IPA's production to the Avery facility.
At the same time, after increasing sales in Hawaii, the Founders announced last month the finalization of the distribution footprint in 50 states.
UPDATE (3:25 pm EST, Aug. 29): The founders issued the following statement:
"Since 2014, we have had excellent relations with the Mahou Group. We are fortunate to have a partner with whom we can exchange brewing knowledge and a business strategy, which also reflects our values as a company. Daily operations will continue to be led by the existing founding team. We will continue to make the beer we love and have a partner in the Mahou group, who is as passionate about beer and the future of the founders as we are.
"The founders will remain autonomous in the management of their activities, products and teams. Engbers and Stevens will continue to be Founders shareholders and have no intention of leaving. Their commitment to the brewery will remain and their roles and responsibilities will continue as they are now. "
The company included a FAQ, noting that Mahou was not planning to buy back the company, that it was not expected to combine Founders and Avery and that he was not planning to brew Mahou's brands in Michigan.
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