Brewery

Verus Exits Pittsburgh Brewing Company

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After almost a seven-year hold, Verus Investment Partners has sold Pittsburgh Brewing Company. The buyer of the company was not disclosed.

Pittsburgh Brewing Company (PBC) produces several well-known brands of beer including Iron City, IC Light, American, Old German, and Block House. The company’s products are primarily distributed in Pennsylvania and nearby states. PBC is headquartered in Pittsburgh (www.pittsburghbrewing.com).

During the Verus’ ownership term, PBC made improvements in new products, marketing, and operations and the company was able to expand its sales outside of Western Pennsylvania. These efforts led to positive revenue growth and the company was able to re-establish its brands as the beers of choice for the greater Pittsburgh area. PBC had marketing partnerships with both the Pittsburgh Pirates and the Pittsburgh Penguins.

“We worked closely with the company to attain the goals we established at the time of our initial investment,” said Chris Fuller, Managing Partner of Verus. “Together, we successfully diversified our product offering, invested in strategic sponsorships with Pittsburgh’s professional sports teams, and expanded into new sales channels.”

PBC has a storied and checkered history. The company was founded in 1861 by Edward Frauenheim and during the brewery’s 150-year history, it has introduced many innovations such as the first twist-off cap, the first snap-top can and the nation’s first light beer. Many years later, after surviving Prohibition (the company produced soft drinks, ice cream and ‘near beer’ and ran a cold storage business to endure those years), PBC was acquired in 1986 by Bond Brewing Holdings, a company controlled by controversial Australian businessman Alan Bond, and was later sold in 1993 to Pittsburgh entrepreneur Michael Carlow. In 1995 the company was acquired out of bankruptcy by Keystone Brewing Company but struggled with labor issues and a sharp decline in sales and again filed for bankruptcy in 2005. In 2007, the brewery was purchased and brought out of bankruptcy by Unified Growth Partners. Verus acquired the assets of the company in April 2011 in a control buyout transaction funded entirely with equity.

“We had a strong partnership with the management team of Pittsburgh Brewing Company and we are proud of the success and growth the company has achieved,” said Richard Moreau, a Partner at Verus. “The business is well positioned to capitalize on consumer trends in the beer industry and we look forward to the next phase of the company’s expansion.”

Verus Investment Partners (formerly known as Uni-World Capital) invests in leveraged buyouts and also makes growth equity investments in companies with enterprise values from $20 million to $100 million and that have EBITDA of more than $5 million. Sectors of interest include consumer products, food and beverage, manufacturing and industrial, business services, and building products. The firm is based in New York (www.veruspartners.com.)

© 2018 Private Equity Professional | January 25, 2018

KPS Capital Partners Exits North American Breweries

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KPS Capital Partners has signed an agreement to sell its portfolio company, North American Breweries Holdings, to Cervecerίa Costa Rica, a subsidiary of Florida Ice and Farm Company, for $388 million in cash.

North American Breweries Holdings (NAB) is one of the largest independently owned beer companies in the United States and the owner of a portfolio of brands including Labatt, Genesee, Seagram’s Escapes, Magic Hat, Pyramid, the Original Honey Brown Lager, Dundee and MacTarnahan’s. NAB operates four breweries and seven retail locations located in New York, Vermont, California, Oregon and Washington. NAB is headquartered in Rochester, NY (www.nabreweries.com).

KPS formed NAB in February 2009 as a platform for investments and growth in the North American beer and malt beverage industries. At that time, KPS also announced NAB’s first three acquisitions: Labatt USA from a subsidiary of Anheuser-Busch InBev; substantially all of the assets of High Falls Brewing Company (now known as the Genesee Brewing Company); and a perpetual license for the Seagram’s Escapes and Seagram’s Smooth brands from Pernod Ricard USA. In 2010, NAB acquired Independent Brewers United, one of the largest craft brewers in the United States, and owner of the Magic Hat, Pyramid and MacTarnahan’s brand families of craft beer.

“In forming NAB, KPS did not buy or invest in a company; rather we created a new company that became one of the largest and fastest growing independent beer companies in the U.S. NAB is a complete validation of the KPS investment strategy of seeing value where others do not, buying right, making businesses better and creating value for our investors. We take immense pride in what NAB has accomplished,” said Raquel Palmer, a Partner of KPS. “We congratulate and thank the NAB management team for their extraordinary tactical execution of our vision, which resulted in the Company’s significant revenue growth year after year and the eventual acquisition by a leading international strategic buyer.”

UBS Securities acted as financial advisor to KPS and NAB with respect to the transaction. Jenner & Block served as legal counsel to NAB and Paul, Weiss, Rifkind, Wharton & Garrison served as legal counsel to KPS.

KPS Capital Partners is the manager of the KPS Special Situations Funds, a group of private equity funds with over $2.5 billion of committed capital focused on investing in restructurings, turnarounds and other special situations. KPS has created new companies to purchase operating assets out of bankruptcy; established stand-alone entities to operate divested assets; and recapitalized highly leveraged public and private companies. The KPS investment strategy targets companies with strong franchises that are experiencing operating and financial problems. KPS portfolio companies, as of September 30, 2012, have aggregate annual revenues of approximately $7.2 billion, operate 89 manufacturing plants in 25 countries, and employ over 30,000 associates, directly and through joint ventures worldwide.  KPS Capital Partners is headquartered in New York (www.kpsfund.com).

© 2012 PEPD • Private Equity’s Leading News Magazine • 10-30-12