After Long Hold, Blue Point Sells Lion to Encore

Encore Consumer Capital has acquired Lion Beverages, a contract and branded manufacturer of specialty beverages, from Blue Point Capital Partners.

Lion Beverages provides brewing, blending, canning, bottling, and packaging services for a wide array of customers including large national beverage brands. The company’s products include energy drinks, non-alcoholic brewed beverages, better-for-you sodas, and craft beer. Lion annually produces approximately 50,000 barrels of its own beers, sold under the Lionshead and Stegmaier brands, for regional distribution in the Northeast. The company, led by President Jeff Meoni and CEO Michael Clarke, is headquartered in Wilkes-Barre, Pennsylvania.

“We are very energized and excited to work with the Encore team,” said Mr. Clarke. “We have a terrific opportunity to leverage Encore’s abilities and expertise as the business continues to drive to reach its full potential.”

“With its experienced management team and efficient operation, we feel Lion is well-positioned for growth in the specialty beverage category over the next few years,” said Scott Sellers, a managing director at Encore.

Encore Consumer Capital invests from $5 million to $30 million in consumer products companies that have revenues between $10 million and $100 million and where it can utilize its own consumer experience and the expertise of its operating partners at Encore Associates, a strategic advisory firm to the consumer products industry. San Francisco-based Encore was founded in 2005 and is currently investing out of its $260 million third fund which closed in 2016.

Encore has been active in the beverages space and acquired Kyla, a Hood River, OR-based brewer of alcoholic kombucha in May 2019; and Full Sail Brewing, a Hood River, OR-based brewer of craft beer under the Session and Full Sail brands in March 2015.

“Lion’s location is ideal to serve the densely populated Northeast, and its consistency in product quality and delivery has afforded the company with demand that exceeds its current capacity,” said Juli Marley, a partner with Blue Point.  “We are delighted to see that our support of the business and management team created numerous growth opportunities and positioned Lion to continue to build on and realize optimized results throughout its future.”

Blue Point first invested in Lion in October 2007 and its investment was held through U.S. Drinks LLC, a portfolio company of Blue Point’s $400 million second fund which was raised in 2006. During Blue Point’s more than 12-year ownership term, EBITDA at Lion nearly doubled.

Blue Point invests in companies that are active in the manufacturing, distribution and business services sectors and have from $20 million to $300 million in revenue and EBITDA greater than $5 million. The firm has offices in Cleveland, Charlotte, Seattle, and Shanghai.

Cascadia Capital was the financial advisor to Lion on this transaction.

© 2020 Private Equity Professional | January 10, 2020

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