BrewDog valued at £1bn as TSG takes stake

BrewDog co-founders Martin Dickie (left) and James Watt

Aberdeenshire-based craft beer company BrewDog said San Francisco private equity firm TSG Consumer Partners acquired 22% of BrewDog in a transaction that values BrewDog at roughly £1 billion.

According to reports, BrewDog co-founders James Watt and Martin Dickie could share up to £100 million as a result of the deal.

Ellon-based BrewDog had relied on its successful crowdfunding rounds called “Equity for Punks” for most of its development so far and the firm said those early investors would now also reap the rewards from the company’s success.

In a message to investors, Watt said: “TSG has acquired approximately 22% of the company in a transaction where £100 million in proceeds went into the company for continued expansion and the balance to create early shareholder liquidity in a transaction that valued BrewDog plc at £1 billion enterprise value …

“The deal will enable us to take our business, and your investment in BrewDog, to the next level.”

The reports said TSG is also buying £113 million of BrewDog shares from existing investors, which will take TSG’s total outlay to £213 million and slightly reduce the shareholdings of Watt and Dickie.

Watt added: “The details regarding the proposed investment were provided to all Equity Punks in advance of a special meeting held on March 29th to consider required changes to the company’s capital structure, and the Punk community overwhelmingly approved the terms by a vote of 95% in favour.

“At a £1bn valuation, shares purchased in Equity for Punks I, which closed in February 2010, are now worth 2,800% of their original value.

“Even craft beer fans who invested in Equity for Punks IV last year have seen the value of their shareholding increase by 177% in just one year.

“Our new partnership with TSG is a launch pad for us to turbocharge our mission to make the world as passionate about craft beer as we are, but it’s also a validation of our crowdfunding model.

“Our Equity Punks now own part of an independent business which has attracted an awesome partner that will help grow their investment even further.

“Crowdfunding can no longer be viewed as alternative finance; this is the democratisation of finance …

“We will contact you all by email next week offering you the chance to sell 15% of your equity (capped at 40 shares per investor) …

“For Equity Punks who still believe fully in our company and its mission and prospects and who don’t want to sell any of their shares at this time, we will recognise your continued support and loyalty with an amazing beery alternative to the redemption opportunity.

“As a thank you for believing in us and continuing on this journey with us we will send you a voucher to collect 6 cans of our upcoming (and hotly anticipated) Vermont Style IPA in any of our bars, on us.

“Ever since we first started this journey in Martin’s mum’s garage, BrewDog has existed to make other people as passionate about great craft beer as we are.

“We remain more laser focused on that goal than ever before.

“Martin and I still remain controlling shareholders and fully committed to BrewDog, and this investment will allow us to accelerate our mission.

“We’re not going to let the deal go to our heads, but Martin did buy himself a new jumper.”