Reporting on private equity is thirsty work. After a week of imparting truth and wisdom to its faithful readers, First Round is partial to a pint or two. While it would be improper to reveal its tipple of choice, the brand of the moment for many discerning quaffers is BrewDog.
Inspired by punk, the Scottish craft brewery has rocked the market (forgive the pun) since it started in 2007. Beers called things like Cocoa Psycho, with interesting flavours and often eye-watering alcohol percentages, along with marketing stunts, such as driving a logo-emblazoned tank down a London street, have given it an enviable degree of brand awareness. And with sales growth of 131 percent in 2015, it was only a matter of time before private equity came knocking.
Given its rebellious image, how would BrewDog take to a PE approach? Which firm, if any, would be punk enough to turn their Mohican-adorned heads?
The answer, it turns out, is TSG Consumer Partners. The San Francisco-based fund picked up a 22 percent stake for £213 million ($273 million; €254 million), citing the appealing combination of ‘rebellion’ and ‘business-savvy’ exuded by company founders James Watt and Martin Dickie. This cash should come in handy as BrewDog chases the dream shared by so many: conquering America.
While no doubt boosting the bank accounts of Messrs Watt and Dickie, the windfall will be widely shared. BrewDog is the most successful crowd-funded business in the UK. It carried out four fundraising rounds, the last of which, in 2015, raised £5 million. If you were one of the ‘equity punks’ to have participated in the first round in 2010 your shares will now be worth 2,800 percent more. That’s definitely worth celebrating with a few glasses of Elvis Juice or Dead Pony Club.