beer

TSG Consumer Partners Invests in Pabst

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Oasis Beverages, an international beer and beverage company, and TSG Consumer Partners will acquire Pabst Brewing Company in a transaction that values the company at $700 million to $750 million.  Oasis Beverages will hold a majority equity interest in Pabst while TSG will own a minority interest.  The Chairman of Oasis Beverages, Eugene Kashper, will serve as the CEO of Pabst and the company’s headquarters will remain in Los Angeles.

Pabst Brewing Company is North America’s largest privately held brewing company. The company’s portfolio of brands includes Pabst Blue Ribbon, Lone Star, Rainier, Ballantine IPA, Schlitz, Old Style, Stroh’s and Old Milwaukee.  Pabst is currently owned by C. Dean Metropoulos & Co., a buyer and builder of consumer branded products, which acquired Pabst in 2010 for approximately $250 million.  Pabst was founded in 1844 (www.pabstbrewingco.com).

“Pabst has a strong portfolio of authentic American brands including Pabst Blue Ribbon, Rainier, Lone Star, Old Style, Schlitz and National Bohemian, among others.  We’re excited about the partnership with Eugene and the outlook for Pabst going forward,” said Brian Krumrei, managing director at TSG.

TSG Consumer Partners makes control and non-control investments of $15 million to $100 million in companies with EBITDAs of $3 million to $50 million where there is an opportunity to enhance value by extending brand, expanding distribution and/or improving operations. Since its founding in 1987, TSG has been an active investor in the food, beverage, restaurant, beauty, personal care, household and apparel & accessories sectors. The firm has $2.9 billion in equity capital under management and is headquartered in San Francisco (www.tsgconsumer.com).

Oasis Beverages produces beer, soft drinks and juices.  According to the company, it is the leading independent brewer in Russia. The company was founded by Eugene Kashper in 2008 and has operations in Russia, Ukraine, Kazakhstan and Belarus (www.oasisdrinks.com).

“Pabst Blue Ribbon is the quintessential American brand – it represents individualism, egalitarianism, and freedom of expression – all the things that make this country great.  The opportunity to work with the company’s treasure trove of iconic brands, some of which I started my career selling, is a dream come true,” said Mr. Kashper.  “It will be an honor to work with Pabst’s dedicated employees and partner distributors as we continue to build the business. We intend to invest meaningfully in the organization, to continue strong marketing support for Pabst’s unique brands, and to drive new product innovations and renovations, such as the recent launch of Ballantine IPA.”

Mr. Kashper began his career in the beer industry in 1994 with The Stroh Brewery Company. Since then, Mr. Kashper has managed brewing companies in Eastern European and CIS countries and, as mentioned above, currently serves as Chairman of Oasis Beverages.

UBS Investment Bank is serving as financial advisor to Mr. Kashper. Perella Weinberg Partners and Credit Suisse Securities (USA) are serving as financial advisors to Pabst.

Ropes & Gray is representing TSG Consumer Partners in this transaction.  The Ropes & Gray team included mergers & acquisitions partner Christopher Comeau, tax partner Lee Allison, benefits partner Renata Ferrari, finance partner Thomas Draper, real estate & environmental partner Peter Alpert, intellectual property transactions partner David McIntosh, antitrust counsel Deidre Johnson, and private equity associates Charles Boer, Sandy Boer and Daniel Cowan.

2014 PEPD • Private Equity’s Leading News Magazine • 9-22-14

KKR and Affinity Exit Oriental Brewery

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AB InBev has entered into an agreement with KKR and Affinity Equity Partners to acquire Oriental Brewery, a South Korea brewer, for $5.8 billion. The transaction is subject to regulatory approval in South Korea and is expected to close in the first half of 2014.

Oriental Brewery (OB) is South Korea’s largest beermaker. Brands include OB, Cass and Cafri. The company was founded in 1933 and is based in Seoul (www.ob.co.kr). OB will become a part of AB InBev’s Asia Pacific Zone, led by Zone President Michel Doukeris.

Oriental Brewery’s EBITDA in 2013 was 529 billion won ($497 million) compared with 238 billion won ($293 million) in 2009. This translates to a purchase multiple of approximately 6.1x in 2009 and a sale multiple 2014 of 11.7x.

KKR acquired Oriental Brewery from InBev in July 2009 for $1.8 billion. As part of that transaction, InBev had a five-year option to repurchase the company from KKR based on a formula driven EBITDA valuation. After closing the purchase, KKR then sold 50% of Oriental Brewery to Affinity Equity Partners.

The July 2009 sale of Oriental Brewery to KKR was part of an asset sale program initiated by InBev to pay down acquisition debt related to the company’s $52 billion purchase of Anheuser-Busch in 2008.

“We are proud to have partnered with Oriental Brewery these past five years,” said Joseph Bae, Managing Partner of KKR Asia and Kok Yew Tang, Chairman and Managing Partner of Affinity. “The success experienced since 2009 is a testament to all the employees of OB, and we are gratified to have invested in the company and supported the company’s growth as well as their environmental and citizenship initiatives.”

AB InBev is a Belgian-Brazilian multinational beverage and brewing company. It is the world’s largest brewer with nearly 25 percent global market share. The company has more than 200 brands which include Budweiser, Corona, Stella Artois, Beck’s, Lowenbrau, and Bud Light. The company employs around 116,000 people in over 30 countries and is headquartered in Leuven, Belgium (www.ab-inbev.com).

AB InBev will fund the acquisition of Oriental Brewery with internal resources.

KKR makes private equity, fixed income and other investments in companies in North America, Europe, Asia and the Middle East. The firm has $90 billion in assets under management. KKR was founded in 1976 and in addition to its New York headquarters the firm has offices in Menlo Park, San Francisco, Houston, Washington DC, London, Paris, Hong Kong, Tokyo, Beijing, Mumbai, Dubai and Sydney (www.kkr.com).

Affinity Equity Partners has $8 billion of assets under management and typically invests in companies with enterprise value or net sales of $100 million to $500 million that are located in Australia, Greater China, Hong Kong, Japan, Korea, Singapore and Taiwan. The firm is industry agnostic but has specific interest in consumer-related goods and services, value-added manufacturing, healthcare, financial services and business services sectors. Affinity Equity was formed in March 2004 following the spin-off by UBS AG of its UBS Capital Asia Pacific team. Affinity currently advises and manages approximately $8 billion of funds and assets, making it one of the largest independent private equity firms in the Asia region. Affinity has offices in Hong Kong, Singapore, Seoul, Sydney, Beijing and Jakarta (www.affinityequity.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 1-21-14

Fireman Capital Partners Invests in Squatters and Wasatch Beers

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Fireman Capital Partners has made an investment in Squatters and Wasatch Beers, a craft brewery and operator of brewpubs and restaurants. The new investment will support further expansion of the Squatters and Wasatch portfolio of craft beers, distribution growth, brand and marketing initiatives, and the continued expansion of its brewpub business.

“This investment opens the door to the next level for Squatters and Wasatch, and provides the financial firepower and expertise we need to meet rapidly growing demand for our beer and to reach new markets,” said Peter Cole, Founding Partner of Squatters.

Squatters and Wasatch is one of the top 50 craft brewers in the country. The company’s bottled and draft beers are available in liquor stores, restaurants, clubs, hotels, resorts, grocery and convenience stores throughout Utah, Wyoming, Nevada, Arizona, New Mexico, Texas, Wisconsin, Louisiana, Minnesota, South Dakota, Nebraska and Oregon. The company also operates five brewpubs and restaurants in Salt Lake City and Park City, UT. Squatters and Wasatch has 300 employees and is headquartered in Salt Lake City (www.utahbeers.com).

Greg Schirf, the founder of Wasatch Brewery, will continue to manage brewery operations for the company. Joe Lambert, Operating Partner for Squatters since 1996, will continue to oversee the restaurant business.

“We are excited by Fireman Capital’s support of our brands, our beer, and our tremendous business potential. Our brewery has grown rapidly over the years, with recent penetration of large, attractive markets outside Utah. We look forward to our partnership with Fireman Capital Partners and to the resources and expertise they bring to the table,” said Mr. Schirf.

Fireman Capital Partners was established in 2008 under Chairman Paul Fireman and Managing Partner Dan Fireman.  The firm invests in consumer products companies with revenues between $10 and $150 million. The company is based in Boston (www.firemancapital.com).

“We are thrilled to support Joe and Greg and the entire Squatters and Wasatch management team as they continue to grow the business. Built on a combination of outstanding beer, a steadfast commitment to the environment, community, local sourcing and the best ingredients – and set apart by unique, witty and cheerfully subversive branding – Squatters and Wasatch is exactly the kind of successful, market-disrupting company we seek at Fireman Capital,” said Dan Fireman, Managing Partner of Fireman Capital. “Craft beer is a large, rapidly growing industry where companies offering exceptional products and brands like Squatters and Wasatch enjoy enormous potential. We plan to leverage our financial and deep operational resources to assist in growing the brewery through broadening and solidifying its regional distribution network while continuing to expand the brewpub business.”

Fireman Capital Operating Partner Robert Spellman, a Director of Au Bon Pain and former CFO of Staples and Yankee Candle, will oversee the investment for Fireman Capital. Michael Schlow, a Fireman Capital advisor and American restaurateur, will contribute his expertise in restaurant management and menu development. Doug Epstein, owner/manager of Horizon Beverage, one of the largest alcohol and spirits distributors in New England, will serve as an advisor to the business as it grows its distribution footprint.

© 2012 PEPD • Private Equity’s Leading News Magazine • 9-27-12