The $1Billion price blows the $1k*bbl/year benchmark out of the water. Which brewery is next?
$1B is insane.
Wow. I’m pretty sure I’d sell, too.
Same here.
BTW - can someone explain this? Expects $115M in sales in 2015, purchase price $1.0B. That must be some serious accountant wizardry.
I thought the same. Great brewery, but seems like the buyer overpaid by a TAD. Maybe not.
Lagunitas sold 50% for $500 Million, they are about 1000000 bbl/year.
Another one. This means that craft beer is a main stream.
Craft beer is Over! - Portlandia hipster
Next they’ll start buying up the homebrew all-stars! The headlines will read:
“THIS JUST IN! Evil Brewing giant offers Conn and Beechum 100 gigadrillion dollars to homebrew exclusively for Cthulhu in their evil corporate lair.”
[quote author=Bloomberg]Constellation Chief Executive Officer Rob Sands said in an interview that Ballast Point’s value comes in its fast-paced growth and high prices.
[/quote]
So they paid that much because they think they can keep up the growth and pricing. It’s interesting to me given how they had structured their IPO to ensure the founders kept full control. Hard to turn down a pile of cash that size!
Not only had Lagunitas set the tone for a higher price but Ballast Point also has a distilling operation. Distilling is considered the next big boom market in craft products but many of the craft distillers are not big enough or regularly producing enough volume to attract a big buyer. Ballast Point doesn’t produce a large volume of distilled products yet but they have the capacity and experience with distribution chains to easily grow into a larger distilling operation. So it isn’t just about buying the brewery but the combination of the two businesses.
Except the sale didn’t include the distilling side
Some stories seem to contradict and support this claim. I can’t imagine the $1B wouldn’t include the distilling.
I remember not to long ago these posts about breweries cashing in would cause a big debate about “selling out” or not. Now they just get a “meh” followed by a discussion of the details. Just an observation.
I can only wish.
I think people around here are a bit different. I still see that mentality on other forums and comments.
I think we know it’s selling out at this point, but the state of the “craft” beer business is making acquisitions inevitable and therefore not surprising.
It’s obviously going to change the dynamic to one focused on growth, possibly at the expense of other things. When you are owned by a public company that reports to a board of directors and shareholders, that’s a reality.
I personally don’t know what I’d do with a billion dollars. I guess I could open a thousand local brewpubs that cost a paltry million each.
Big companies in every industry usually have trouble innovating. My guess is overtime the acquired breweries will tend to innovate less and concentrate on spreading existing beers to more locales to increase sales.
Because of this, I think there will always be room for smaller local breweries who innovate.
Yeah, I think people are just resigned to the reality of the craft beer scene now rather than liking it. Truthfully, I’d jump on the selling offer in a heartbeat. Hell, who wouldn’t !!! I’ve decided that the only sell outs that bother me are the ones to AB, since their motives in the beer world are suspect.
EDIT - I say good for Ballast Point.
I guess my feelings on the “selling out” question is this “If i just spent 10 to 15 years busting my hump, nights and weekends, and someone just offered me $1BB for my company would I sell it?”. I have to admit my answer would be a resounding “HECK YA!!”.
If I would sell my business why should I be bothered that someone else would too? The fact is with that kind of money any of us could choose to do anything we wanted at that point. All those things we couldn’t do because we had to keep the business going.
I don’t see it as selling out but rather as getting rewarded for your hard work.
This sale is one huge paycheck though. Good for them!
Paul