Brewdg Executive Summary

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Private Equity Brews Another Big Investment

TSG Consumer Partners announced it has bought a stake in a UK craft beer company. The deal leaves the US private equity firm with a 22.3% stake in BrewDog, with the brewer already considering an initial public offering.

The deals finer details

BrewDog started in 2007,when founders James Watt and Martin Dickie began their venture in the competitive craft beer industry. At the start, the Aberdeenshire-based brewer got by with a £20,000 ($) bank loan but since the early start, investors have begun interested in the business.

According to the reports, TSG Consumer Partners invested £213 million (around $). The money will be partly paid to the brewer’s co-founders (around £100 million), with another …show more content…

The brewer is currently building a new brewery in the US. It has also set its sights in Australia and Asia. However, Watt also highlighted the brand’s commitment to its UK roots to the BBC.

Rewards to early investors

Before the private equity deal, the brewer has relied on crowfunding with around 55,000 small investors investing in the business. BrewDog investors will be allowed to sell shares this week, but only up to 15% of their holdings and a maximum of 40 shares. There will be around £13 million available to the early investors.

According to the Guardian, Watt has guaranteed early investors could make returns of 2,800%. Early investors would be those that bet on the business in 2010. But even late-stage investors could make a 177% return if they choose to sell the shares.

The private equity deal sees Watt remaining as the largest shareholder, with a 25% stake decreasing slightly from 35%. Dickie’s shares will reduce from 30% to 22%.

Plans for an IPO

The private equity investment also saw the brewer acknowledge the long-term option of going public. Watt told City A.M. the aim is to go public within the next five years. “That’s one of the reasons we wanted to partner with TSG. They have successfully done IPOs before, which is our long-term plan,” he