Rumors that have been swirling around Florida-based Cigar City Brewing being purchased—most likely by Anheuser-Busch—can be put to rest, as the Brewbound news site breaks the news this morning that in fact they are being purchased by “Boston-based private equity firm Fireman Capital Partners, which already owns majority stakes in Oskar Blues, Perrin Brewing and the Utah Brewers Cooperative outfit that includes the Wasatch and Squatters brands.”
It’s a good article, well-detailed, and reveals that Cigar City had in fact signed a letter of intent with AB before that expired and they settled with Fireman Capital. From the article:
According to Redner, Cigar City was in serious discussions with A-B InBev and had even signed a letter of intent with them in late 2015. In doing so, the smaller brewery had also agreed to an “exclusivity” clause that prohibited it from negotiating with other potential buyers, Redner told Brewbound.
In other words, if A-B wanted to make a formal offer for Redner’s business, it could have done so without the fear of being outbid.
But a potential deal fell through after A-B neglected to send a formal purchase agreement before the exclusivity period expired, Redner claims, enabling Cigar City to entertain other offers.
The deal with Fireman came together over the last two weeks, he said.
While A-B was performing it due-diligence, however, Redner said he began having second thoughts.
“I was almost at the altar with someone else, but it never felt 100 percent right,” he said. “It was a potentially life-changing opportunity and ultimately, I thought that I wasn’t going to be happy. No amount of money was going to make me happy.”
A deal with Oskar Blues and Fireman Capital, he said, will allow Cigar City to preserve a culture it has worked hard to build since launching in 2009.
Interesting to see the growth of the private equity-based acquisitions. Now I wonder, will there be a similar backlash against Cigar City for the purchase, and/or how would it have compared to being purchased by Anheuser-Busch?