Tilray Brands is acquiring eight craft brands from Anheuser-Busch InBev in a blockbuster all cash deal announced today.
Tilray – the Canadian cannabis firm that is quickly shedding that standalone image – will acquire the following brands once the deal closes later this year:
- Shock Top;
- Breckenridge Brewery (Littleton, Colorado);
- Blue Point Brewing Company (Patchogue, New York);
- 10 Barrel Brewing Company (Bend, Oregon);
- Redhook Brewery (Seattle, Washington);
- Widmer Brothers Brewing (Portland, Oregon);
- Square Mile Cider Company (Portland, Oregon);
- Hiball Energy (which A-B discontinued in May).
“The purchase price to be paid to AB at closing is equal to $85 million in cash, subject to working capital and other adjustments,” according to an 8K filing by Tilray. The deal is expected to close by the end of September 2023.
The transaction will encompass “current employees, breweries and brewpubs associated with these brands,” Tilray said in a press release.
Those companies will join an existing craft beer portfolio that includes SweetWater Brewing, Montauk Brewing, Green Flash, Alpine Beer Co. and the newly created Good Supply lager brand, as well as Breckenridge Distillery.
Once completed, the sales volume of Tilray’s craft portfolio is expected to make it the fifth largest craft brewery in the U.S., with 5% share of the market, the company said. Pro forma revenue for Tilray’s craft beer portfolio is projected to top $250 million.
Four of the expected-to-be-acquired brands – Shock Top, Breckenridge, 10 Barrel and Blue Point – produced a combined 495,000 barrels of beer in 2022, according to the Brewers Association (BA). Production data for Widmer Brothers, Redhook, Square Mile and Hiball were not broken out separately.
The deal is expected to “triple” the size of Tilray’s beer business, from 4 million cases to 12 million cases annually, Ty Gilmore, president of U.S. Beer at Tilray Brands, said in the release.
“Looking ahead, we will further capitalize on the potential of these brands through product innovation, retailer partnerships and expanded distribution into key markets, including the Pacific Northwest and California,” he continued.
Tilray will exit the deal with production facilities in Portland and Bend Oregon; Littleton, Colorado; and Patchogue, New York. The deal will also include brewpubs in:
- Seattle, Washington;
- Bend, Oregon (x2);
- Portland, Oregon;
- Boise, Idaho;
- Littleton, Colorado;
- Breckenridge, Colorado;
- Patchogue, New York.
Tilray CEO and chairman Irwin D. Simon has been bullish about the company’s prospects within the craft brewing industry. He reiterated those comments in today’s deal announcement, saying the transaction “solidifies our national leadership position and share in the U.S. craft brewing market and marks a major step forward in our diversification strategy.”
“Tilray is fully committed to invest in and champion the future of the U.S. craft beer industry by fueling new innovation that excites and further accelerates the growth of its consumer base,” Simon said.
Simon added that the company plans “to drive both revenue and cost synergies, while significantly expanding national distribution to coveted markets across the U.S. and internationally.”
“In a matter of three years, Tilray has solidified its leadership position in the craft beer industry, and we fully intend to be that change agent that reinvigorates the sector,” he continued. “Upon federal cannabis legalization, we expect to leverage our leadership position, wide distribution network and portfolio of beloved beverage and wellness brands to include THC-based products and maximize all commercial opportunities.”
Andy Thomas, president of A-B’s High End craft division, indicated in a press release that Tilray inquired earlier this year about “purchasing these brands and breweries.”
“The talented people behind these brands and breweries, along with our significant investments in them over the years, have positioned them for a bright future with Tilray Brands,” Thomas continued. “We are committed to working with Tilray Brands over the coming months to ensure this is a smooth transition for the people who are working every day to get these amazing beers and beverages to consumers across the U.S.”
Tilray is expected to share additional details during a webcast at 4:45 p.m. ET today.
For more details, read the full report on Brewbound.