Yucaipa Cos., the private equity firm founded by grocery store magnate Ron Burkle, is set to buy a majority stake Brew Hub LLC, a startup beer company in St. Louis, Mo., as part of a plan to jumpstart an effort to build five 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 to $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 supplies 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, Saint 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.
The Yucaipa story was first reported by the Wall Street Journal on March 19.
For more coverage of the craft brewing sector, see “All You Can Drink," and for deals within the larger beverage sector, see “AB InBev Sells U.S. Rights to Corona and Other Modelo Brands to Constellation,” “Look to Kirin for More Beer Deals in Asia,” and “Carlsberg Frothy in China.”