Ron Burkle Taps Frothy Beer Market
The $100M deal comes as Northern Brewer receives an undisclosed investment from Entrepreneur Partners, amid a frothy time for the sector
Yucaipa Cos., the private equity firm founded by grocery store magnate Ron Burkle, is set to buy a majority stake in Brew Hub LLC, a startup beer company in St. Louis, Mo., as part of an effort to build new breweries.
Yucaipa intends to spend more than $100 million to fund the expansion, which will take place over the next five years.
Instead of brewing its own beer, Brew Hub intends to house up to six other small brewers in each of the five facilities, as a means of helping the craft beer community expand production in new markets.
The new venture will also offer brewers distributing and marketing support.
The announcement comes on the heels of Entrepreneur Partners LP, once again, writing a check to Northern Brewer LLC, a retailer of home brewing and home wine-making supplies.
The Philadelphia-based firm, which made an initial investment in Northern Brewer in 2011, has increased its stake. Terms of the deal weren't disclosed, but Entrepreneur Partners generally spends between $3 million and $40 million on U.S.-based companies with Ebitda of $2 million or more, according to the firm's website.
Lending firm Golub Capital provided debt financing for the transaction. Roseville, Minn.-based Northern Brewer sup-plies beer and wine makers with a variety of home-brewing supplies, including starter kits and tap handles.
The company currently operates out of three retail locations in Minneapolis, St. Paul, Minn., and Milwaukee, and has a 36,000-square-foot facility to handle orders nationwide.
Both deals underscore the intense land-grabbing within the growing craft beverage industry, namely when it comes to brewing beer and wine.
According to Boulder, Colo.-based trade group Brewers Association, craft beer volume grew by 15 percent in the U.S. in 2012.
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