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BrewDog’s £213m private equity deal is ‘opposite of a sell-out’ says co-founder

By Nikkie Sutton , 10-Apr-2017
Last updated on 10-Apr-2017 at 13:55 GMT2017-04-10T13:55:19Z

Shares sold: co-founder James Watt claims the stock sale is 'not a sell-out'
Shares sold: co-founder James Watt claims the stock sale is 'not a sell-out'

BrewDog has defended its decision to sell 22% of the company to private equity firm TSG Consumer Partners claiming the deal is not a sell-out.

The £213m deal involved £100m to fund BrewDog’s continued global expansion and the Scottish brewer is now valued at £1bn.

The brewer gave all shareholders in the Equity Punk scheme the details of the proposed investment in advance of a special meeting held last month (29 March) and they overwhelmingly approved the terms by a vote of 95% in favour.

BrewDog co-founder James Watt told The Morning Advertiser the brewer has had private equity investment since 2009.

He said: “If you’re selling out, you’re out [of the business] so this is the opposite of a sell-out.

“If it was a sell-out, I would be on a beach somewhere and not working my arse off for the next 10 years!

“It was a minority deal so if TSG owns 22.3% of our business, I remain the single largest shareholder meaning we are still free to run the company exactly as we wish.”

Offers refused prior to deal

He laid out the process BrewDog took when finding a company to partner with for the investment.

Watt explained: “We took a long time to do this deal because we had a lot of criteria that was important to us such as a long-term deal so this has a 10-year horizon.

“We did turn down a few offers that were higher than TSG but we felt it was the right fit for us and it aligns with what we are looking to do.”

Watt also explained how the investment will help the business expand in the future and the plans its has.

He said: “The challenge has been to keep up with demand for our beers so this will allow us to get ahead of the curve in terms of capacity.

“We have now got 35 sites in the UK and we want to get to 100 UK sites within five more years.

“[The deal] will also help us open a few larger sites as we want to open five UK sites where we make beer on-site as well.”

Ideal fit 

TSG Consumer Partners managing director Blythe Jack outlined why the deal took place between the firm and the brewer.

He said: “BrewDog is an ideal fit for TSG’s mission, which is to partner with visionary founders building next-generation consumer brands.

“The company is truly a pioneer and leader in the rapidly emerging international craft beer market."

At a £1bn valuation, shares purchased in Equity for Punks I, which closed in February 2010, are now worth 2,765% of their original value.

Beer fans that invested in Equity for Punks IV, which closed in April 2016, have seen the value of their shareholding rise by 177% in just one year.

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