INNIS & Gunn has vowed to ramp up its growth plans after a US private equity giant acquired a near 30 per cent stake in the brewer for £15 million.
L Catterton, which has $14 billion invested in consumer brands around the world, has purchased a 27.9 per cent shareholding in the Edinburgh-based beer firm.
The deal, which involved enlarging the share base in the business and shareholders selling some equity to the investor, values Innis & Gunn at £54m.
It comes shortly after fellow Scottish craft beer firm BrewDog sold a 22.3 per cent stake to US private equity player TSG Consumer Partners for £100m.
Innis & Gunn, which is aiming to capitalise on booming global demand for craft beer, said the investment by L Catterton “reflects and confirms” the price paid by investors who took part in a crowdfunding drive staged by the company in November last year. That campaign, which was over-subscribed, raised £2.4m from 1,914 investors, who collectively acquired 4.6 per cent of the company’s equity as a result of the offer.
Innis & Gunn, which exports is beer to 28 countries, signalled its ambition to drive sales in key export markets and add to its Beer Kitchen bar and restaurant chain around the UK and overseas after the success of the crowdfunding drive.
Now the company, which had earlier acquired the Inveralmond Brewery in Perth after raising £3.1m in a bond offer, is planning to accelerate those plans.
According to its most recent accounts Innis & Gunn, founded by Dougal Sharp in 2003, made a profit of £331,000 on turnover of £14.4m in 2016. Its current ambition is to double its 2015 turnover of £11.8m by 2018.
Mr Sharp, who is the biggest shareholder in Innis & Gunn, said he had struck a deal with L Catterton after talking to a range of potential investors.
He said L Catterton was attractive to the company because of its expertise in building the brands of its investee companies, which include Kettle Foods, Elemis and Pepe Jeans & Hackett, and networks. But he also said an “instant rapport” had developed between the two teams from the beginning of the nine-month negotiation period. “We are 100 per cent aligned in our ambition to grow Innis & Gunn into a leading international craft beer business. That was a big part of the attraction,” Mr Sharp said.
While the growth strategy mapped out for the business at the time of last year’s crowdfunding drive “remains unchanged” further to the backing from L Catterton, Mr Sharp declared that those plans can now be accelerated.
“We believe we can grow even faster in the UK and Scotland,” he noted. “The lager has doubled in [size] in the grocery channel. It is growing like crazy but we are looking at ways we can grew even faster than that.”
The UK is one of the company’s four core markets, alongside Sweden, Canada and the US, with sales led by its Innis & Gunn Original product. France is fast emerging as a fifth core market, following the introduction of a joint venture in the country. Mr Sharp said France is on track to become a 100,000-case market for the brand. “The growth has been phenomenal,” he added.
Asked if L Catterton had a likely exit timeframe in mind, he replied: “Clearly, they are a private equity house and that is part of their thinking. However they have had some investments for more than 10 years.”
Mr Sharp, a one-time head brewer at Edinburgh’s Caledonian Brewery, said in an earlier statement: “The craft beer category is booming globally, and this is a hugely exciting opportunity at the right time for us to build strongly on the solid foundations that have been laid to double our 2015 turnover by 2018. Innovation and quality have been at the heart of Innis & Gunn’s success since day one, and this continues to drive us forward.
“Aside from providing additional capital to accelerate our growth plans, we believe L Catterton will strengthen our business with unparalleled expertise in brand building and a deep understanding of global consumer markets”.
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