It's no secret mergers and acquisitions have dominated the craft beer landscape in recent years. Now another deal has hit close to home.
Under the deal, investment group Storied Craft Breweries will acquire 56 percent of Deep Ellum Brewing, "at least in part by buying out more than 20 minority partners from earlier investment rounds," Brewbound reports.
Storied Craft Breweries is a startup out of Chicago billed by Brewbound as an alternative to beer big companies and private equity firms for craft breweries looking for funding and business expertise. The company is run by several seasoned veterans from the marketing and alcohol industries, including Adam Lambert, formerly of Dogfish Head Craft Brewery and New Holland Brewing, and Steven Berg, who's worked for Bacardi Imports, Coors Brewing Co., and Effen Vodka.
John Reardon, founder and CEO of Deep Ellum Brewing, will maintain his post and gradually increase his ownership share to 40 percent of the business from 38 percent. The remaining 4 percent belongs to two minority partners, he told GuideLive.
According to Brewbound, Deep Ellum Brewing Co. will now have access to $10 million in growth capital, which Reardon says he'll use to build out capacity at the Dallas location — and potentially a new facility somewhere else in Deep Ellum — and grow the business beyond the region. Reardon says he may eventually pursue opportunities akin to Oskar Blues Brewery's investment in Florida brewery Cigar City Brewing Co., but wouldn't elaborate.
"We have a lot of options right now," Reardon said by text, "but the main focus is growing capacity and continuing to strengthen our brand."
Deep Ellum Brewing Co. is reportedly Storied Craft Breweries' first investment since forming earlier this year.
"Deep Ellum is exactly what we were looking for size wise," Berg told Brewbound. "It is a serious player in Texas already and there is tremendous growth potential in the state."
According to the Brewers Association, Deep Ellum Brewing produced 12,500 barrels of beer in 2015. It expects to hit 33,000 barrels in 2016, according to Brewbound, due in perhaps a small part to its extra capacity at Grapevine Craft Brewery. In addition to beer, Reardon and company are hoping to soon get a distillery in Deep Ellum off the ground.
Deep Ellum is just the latest Texas brewery to enter into an acquisition this year. In August, Revolver Brewing in Granbury sold a majority stake to MillerCoors, and in November, Houston's Karbach Brewing Co. announced plans to sell to Anheuser-Busch.
Reardon maintains Deep Ellum's deal is different than the previous two because it doesn't involve Big Beer.
"This absolutely keeps us independent. Revolver sold out — 100 percent — to a brewery that is not craft, which is what precludes it from being considered craft or independent. Same with Karbach," he said. "My deal is no different than taking on an investment ... I'm still just as in charge as I was before the deal; I just now have a lot more resources at my disposal."