Brynwood adds beverage and beer manufacturer Cold Spring to portfolio

Lower middle-market private equity firm Brynwood Partners has acquired beverage manufacturer Cold Spring Brewing Co. Inc. using funds from the firm’s seventh PE fund. Financial terms of the transaction were not disclosed.

Founded in 1874, Cold Spring is an independent beverage producer serving energy drinks, craft beers and carbonated flavored waters. The Cold Spring, Minnesota-based target primarily makes non-alcoholic and alcoholic beverages for branded products and private labels of other retailers. Cold Spring also brews beer under its own branded product, called Third Street Brewhouse, sold locally in Minnesota and Wisconsin. Previously owned by the Lenore family, the target reports $60 million in net sales.

“The well-run facilities and exciting growth plans for the company represent a great investment opportunity for Brynwood Partners,” states Brynwood CEO Henk Hartong. “While Cold Spring will be operated as a standalone company, we believe it will benefit greatly from the scale and national distribution and manufacturing foot print of Brynwood Partners’ Harvest Hill Beverage Company investment.”

Brynwood, based in Greenwich, Connecticut, has purchased Cold Spring from its $420 million fund, Brynwood Partners VII L.P., which was raised in 2013. PE-backed Harvest Hill is a beverage manufacturer that was formed in June 2014. Since inception, Harvest Hill has grown its portfolio of brands, including: Juicy Juice, Nutrament, Little Hug Fruit Barrels, Big Hug Fruit Barrels, Guzzler, Big Burst, and Daily’s Cocktails. In November 2016, Harvest Hill acquired Faribault Foods Inc. to grow its pouch manufacturing services.

PE firms and strategic buyers have shown a growing interest in beverage companies. Other beverage-related deals include: Mason Wells’ acquisition of King Juice Company Inc.; Cott Corp.’s (NYSE: COT) agreement to purchase coffee seller S&D Coffee Inc. and and coffee machine provider Eden Springs; Monster Beverage Corp.’s acquisition of American Fruits & Flavorsfor nearly $690 million; Dr Pepper Snapple Group Inc.’s (NYSE: DPS) buying all of Bai Brands LLC; General Atlantic’s minority investment in Joe & the Juice, a chain of urban juice and coffee bars; and Falconhead Capital LLC’s purchase of soda maker Multi-Flow Industries LLC.

Holland & Knight LLP served as legal counsel to Brynwood. Cascadia Capital LLC acted as financial adviser to Cold Spring, while Stinson Leonard Street LLP advised on legal matters for the company.