Dogfish Head shareholders will also get $173 million in cash, primarily for the DE company's financial investors, including that private equity firm, LNK Partners.
The companies say they will retain their status as independent craft brewers.More news: Pompeo skips Moscow to meet with European officials on Iran
The Boston Beer Co. announced Thursday that it had entered into definitive agreements to acquire all of the equity interests in Dogfish Head Holding Co. Boston Beer recently reported sales of 4.3m barrels past year, generating more than $1bn in revenue.
When you hear about brewery mergers, they often involve two or more mega-brands incorporating into a super company, such as Anheuser-Busch being acquired by Belgian-Brazilian brewer InBev, or sometimes a craft brewery being swallowed up by a industrial brand - such what happened when beer, wine and spirits juggernaut Constellation Brands gobbled up Ballast Point Brewing for $1 billion dollars in 2015.
Jim Koch and Sam Calagione with their flagship beers. "This merger better positions Dogfish Head and our coworkers to continue growing within this definition for many years to come. We're also proud to announce that we intend to devote a percentage of the Boston Beer stock that we receive to establishing a foundation and funding various local charitable programs". Boston Beer CEO Dave Burwick seemed to hint in a statement that his company won't hesitate to add more brews to its portfolio. In 2018, depletions- or distributor sales to retailers-climbed about 13% from the prior year thanks to increases for Truly Hard Seltzer, Angry Orchard cider, and Twisted Tea. "We expect that we'll see more consolidation in the craft industry over time, and we'll be in the best position to take advantage of those changes".More news: African trio share Premier League Golden Boot
Dogfish Head has also been stuck of late. The company said these factors would depend on market conditions and the deal is expected to finalize over the summer months. While Dogfish shareholders will receive a cash buyout totaling about $173 million, co-founders Sam Calagione and his wife Mariah will receive their compensation entirely in Boston Brewing stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at this hyperlink.
Dogfish Head is expected to record net sales for the full year 2019 of between $110 and $120 million. The deal is expected to be completed later this year. In addition to its production brewery and distillery, Dogfish Head now operates a second brewpub and distillery, a seafood restaurant, and a beer-themed inn in Milton, Delaware. Boston Beer plans to consolidate Dogfish Head results into Boston Beer's financial results beginning late in the second quarter of 2019 and Boston Beer now estimates that the transaction will be neutral to slightly accretive in 2019 and will not have a material impact on full-year 2019 earnings per diluted share.More news: Trump is not above the law, former USA attorney for SC says