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Wednesday, August 11, 2010

Labatt Buys MacTarnahan's, Pyramid, and Magic Hat

Last week Widmer acquired Kona, and today, Labatt bought up the collective of breweries known as Independent Brewers United--that is, Magic Hat, Pyramid and MacTarnahan's. Labatt, which is owned under the title North American Breweries, also owns Genesee and Dundee. In a press release, the new owners claim that they will change nothing:
  • The beer will remain the same: it will be brewed by the same people in the same breweries, using the same recipes, ingredients and commitment to artisanship as it has always been.
  • All breweries, Alehouses and the Artifactory will remain open. They provide a unique opportunity to sample and showcase the company's best beers and brewing capabilities. Through the retail locations, we can talk to customers about the beers they want us to make.
I'm trying to track down someone for a comment on the Mac's side. I'll update you if I can find out more.

Update. Still haven't gotten anyone from Mac's, but there's a nice clarifier from Frank White in comments:
An NYC-based private equity firm called KPS Capital Partners bought bbought both Genesee and Labatt's USA rights (from Bud/InBev) last year, and formed a shell subsidiary called North American Breweries. NAB is now buying IBU, which is Magic Hat, Pyramid & Mac's.

This deal is happening because the private equity fund (Basso Capital Mgmt)that's financed Magic Hat's expansion and subsequent purchase of PyraMac (I just invented that) has been hemorrhaging cash and "has decided to exit the beer business". So they're selling the whole thing to KPS, which specializes in "turnarounds, restructurings, bankruptcies, employee buyouts and other special situations". Basically it's a distressed sale, not strategic in any way.

8 comments:

Matthew D. said...

Someone please correct me if I'm wrong. Wasn't Pyramid a public company before, and one of the reasons Magic Hat acquired it was to make it part of a private/independent again?

Is Labatt a public company? If so, I would find this whole transition ironic I guess.

Frank White said...

Labatt's didn't buy anything. An NYC-based private equity firm called KPS Capital Partners bought Genesee last year, and the US rights to Labatt's (from Bud/InBev,North Amperican Breweries. NAB is now buying IBU, which is Magic Hat, Pyramid & Mac's.

This deal is happening because the private equity fund (Basso Capital Mgmt)that's financed Magic Hat's expansion and subsequent purchase of PyraMac (I just invented that) has been hemorrhaging cash and "has decided to exit the beer business". So they're selling the whole thing to KPS, which specializes in "turnarounds, restructurings, bankruptcies, employee buyouts and other special situations". Basically it's a distressed sale, not strategic in any way.

Frank White said...

Excuse me, what I tried to type is that KPS bought both Genesee and Labatt's USA rights (from Bud/InBev) last year, and formed a shell subsidiary called North American Breweries, which is now buying IBU.

Jeff Alworth said...

Frank, great info--thanks.

Jason said...

I hate to give Dr. Wort credit but he had a post up on July 28th detailing this deal going down. Even a blind squirrel...

Anonymous said...

As a former IBU employee (on the Pyramid side of merger) I can only state the following facts:
1) Magic Hat purchase of Pyramid was done purely for financial and distribution reasons. Magic hat's facade of being a "laid back" craft beer brewery masks the true intent of the corporate greed manned by President Mike Brown.
2) Bringing in former Pyramid VP Martin Kelly was a nice touch, as Kelly had a hatchet to bury since he was ousted from Pyramid for his unethical "corporate" management style.
3) Recreating Pyramid branding utilizing craft beer sales statistics as the driving influence only confused the "FNG" marketing director into a creating a campaign based on the energy drink aesthetic. Energy beer?!? WTF! No wonder sales dropped 40%. Audacious Apricot, Haywire Hef, neon colors?
4) Two companies brought together under a hedge fund only means one thing...financially driven motives.
5) Quote from George Hancock former CEO and co-founder of Pyramid (still a regular @ the seattle alehouse) "Had I known they were bringing Martin back and were going to drive Pyramids reputation into the ground, I would have rethought selling my controlling interest in the company".

dr wort said...

....finds a nut? ;-} Does that apply to Jeff or the Doc? Maybe it depends on perspective? ;-} I focus on national news and politics that affect the NW beer scene. Magic Pyramid buyout is old news, but Jeff thrives more on local occurrences.

dr wort said...

sales drive vs beer quality. Who do you think will win?? :-0

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