BrewDog sips £213 million from TSG

The Aberdeenshire headquartered BrewDog is now valued in excess of £1 billion after it sold a 22.3 percent stake to TSG Consumer Partners, an American private equity firm. The former raised £213 million from the deal. The transaction will result in payment of £100 million to Martin Dickie and James Watt, the co-founders of the brewer. About £100 million will be plowed into the business and the rest of the money will be utilized to purchase shares from the company's early investors. It has earlier subsisted on crowdfunding and a total of about 55,000 small investors.

Scaling up independently

BrewDog was founded in 2007 in the Scottish town of Fraserburgh. The initial investment was a £20,000 loan from the bank. The company's unshuttered its first pub in 2010 in Aberdeen. It clocked £71 million in revenues in 2016. The company published £7 million in pre-tax profits.

Both Watt and Dickie were earlier emphatic that they will never concede their independence to a global beer maker. The TSG deal, they said, will enable them to compete on a global scale. Early investors could expect a windfall of about £13 million. They will now enjoy the opportunity to sell shares- but up to 15 percent of total holdings, or maximum 40 shares. Watt claimed that the returns are much more handsome than any comparable FTSE tracker fund.

Branding and roots

The cash from TSG Consumer Partners comes at a juncture when BrewDog is in an expansion mode. It is constructing a spanking new brewery in Oho. The company has selected Columbus as the site for brewing in North America until now. It has plans to launch its offerings in Asia and Australia after the United States. The company is best known for its Punk IPA brand. Its Headliners offerings are those beers whose stand shoulder  to the hop flecked shoulder beside it. These two are the company's most popular offerings. The company claims that no preservatives or ingredients are added to the beer.

Watt insisted, that despite BrewDog's worldwide expansion plans, it remains fully committed to its Scottish roots, and specially Aberdeenshire. He assured beer aficianados that its craft beer will not suffer dilution due to the company's quick growth or the injection of money through “mainstream” financing. He appealed to drinkers that it is not about scale but about values and passion. It concerns the quality present in every bottle the company sells.

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