BrewDog has been acquired by Tilray Brands, a US company specializing in consumer goods, pharmaceuticals, and cannabis, for a discounted price of £33 million.
Tilray announced today (2 March) that the transaction will be finalized through a pre-pack administration, following weeks of speculation. This move ensures the retention of 733 jobs across BrewDog’s headquarters, brewing, and bar operations.
Tilray Acquires BrewDog
As part of the agreement, Tilray will acquire BrewDog’s brands, its brewery located in Ellon, Scotland, and “11 key brewpubs” across the UK and Ireland, including its main location in Waterloo, London. Consequently, 38 BrewDog bars in the UK will shut down immediately, leading to 484 job losses.
Joint administrators AlixPartners have stated that there will be no returns for any equity holders, including those who participated in BrewDog’s Equity for Punks crowdfunding initiative.
“At no point during the sales process did any potential bidder present an offer that would have maintained BrewDog in its entirety,” stated the restructuring firm.
Impact on Jobs
“As anticipated over the last fortnight, we have seen considerable interest in the BrewDog brand from potential buyers within both the trade and investment sectors,” stated Clare Kennedy, managing director at AlixPartners. “With Tilray, we have found a buyer who is genuinely passionate about craft brewing and will serve as an outstanding steward and supporter of the business in the coming months and years.”
“Having accomplished this, our main focus now is to provide support, to the greatest extent possible, to those individuals whose positions have been eliminated. We encourage operators in the UK leisure industry who are able to help to reach out to us at any time.”
Additional discussions
Details of the Acquisition
In addition, Tilray announced that it is in talks to acquire specific BrewDog assets located in the United States and Australia. As noted earlier, BrewDog’s operations in Germany, which include three bars and a brewery in Berlin, will not be part of the transaction and are scheduled for liquidation.
BrewDog’s acquisition was described by Tilray as “a major chance for expansion within the UK and previously unexplored international markets,” according to their statement.
“BrewDog stands out as one of the most renowned, purpose-driven craft beer brands in the UK,” remarked Tilray CEO Irwin Simon. “It has played a pivotal role in transforming modern craft beer through daring innovation, bold creativity, and a steadfast dedication to exceptional beer.
Closure of BrewDog Bars
“As we embark on a new journey for this remarkable brand, our main focus is to realign BrewDog with the craft beer quality that initially garnered its popularity and to strategically invest in restoring operations to a path of profitable growth.
“The future of BrewDog is promising, and we are dedicated to ensuring that the brand continues to lead and motivate the global craft beer movement.”
According to Tilray, BrewDog was projected to achieve annual revenues of approximately $200 million ($150 million) and an adjusted EBITDA ranging from $6 million to $8 million.
The agreement is expected to elevate Tilray’s yearly beverage revenue beyond $500 million (£373 million) and achieve positive cash flow by the fiscal year 2027, as stated.
Who is Tilray Brands, Inc.?
Founded in 2013, Tilray Brands initially focused solely on cannabis production but has since expanded its operations to include a wider range of FMCG offerings in the beverage, alcohol, and wellness industries, particularly as progress on legalization in the US has slowed.
In recent years, the Nasdaq-listed firm has positioned itself as the fourth-largest craft brewery in the United States through a series of mergers and acquisitions.
The reasons behind the sale of BrewDog
The announcement regarding the deal arrives just under three weeks after BrewDog revealed it had engaged the restructuring firm AlixPartners to oversee an expedited sales process for the Scottish brewery, after experiencing five consecutive years of pre-tax losses.
BrewDog, established in 2007 by James Watt and Martin Dickie, experienced an impressive growth trajectory during its first ten years, culminating in the acquisition of a minority share by the private equity firm TSG Consumer Partners in 2017.
The agreement resulted in Watt and Dickie receiving a total of £100 million, but it also changed BrewDog’s shareholder framework, granting TSG a superior class of shares compared to the 220,000 retail investors in the company.
This ensured that – should a sale occur – TSG would be assured of receiving a payout before BrewDog’s other investors.
Since 2017, BrewDog has encountered more challenging circumstances, unable to achieve profitability since 2019 as revenues stagnated. For the year ending 31 December 2024, net revenues remained unchanged at £280 million, while pre-tax losses were reported at £36.6 million, a decrease from £59.2 million the previous year.
Even with additional funding from TSG and a reorganization revealed last October, BrewDog’s situation had not significantly improved by the start of the new year, leading to the appointment of AlixPartners as joint administrators on Monday.
