First Beverage Group, one of the top dealmaking firms in the beverage industry, today announced that it has spun off its investment banking division and merged the unit with Seattle-based Cascadia Capital’s consumer and retail team.
Specific financial terms of the transaction, which closed on March 5, were not disclosed.
As part of the deal, First Beverage Group founder and CEO Bill Anderson will obtain a seat on Cascadia Capital’s board of directors. All employees of First Beverage Financial, the official name of the company’s banking arm, will also join Cascadia Capital.
“This partnership provides the ability to deepen the level of service offered to our existing client base and enables us to continue our purposeful expansion into additional beverage industry segments,” Anderson said via a press release.
First Beverage Ventures, the group’s private equity division, which has invested in emerging companies such as Drizly, Health-Ade Kombucha and Essentia Water, among others, was not included in the deal.
First Beverage managing partner Townsend Ziebold has led the dealmaking team and will join Cascadia. He told Brewbound that the deal would enable the First Beverage team to broaden its reach beyond beverage into sectors such as food, restaurants, retail and e-commerce, among others.
“Cascadia has a much larger consumer platform,” he said. “This gives us a deeper knowledge and more capability in all things consumer. If you look at their book of business, it is pretty complimentary, so we viewed this as a classic one-plus-one-equals-three situation.”
He added that the combination with Cascadia would allow the company to diversify into craft spirits and wine.
Over the last four years, First Beverage Group has established itself as the leading dealmaker in the craft beer space. During that time, it was involved in 18 craft brewery transactions, including the sale of Anchor Brewing to Sapporo. It also advised Brooklyn Brewery in its minority sale to Kirin.
The firm has also worked with a number of non-alcoholic beverage companies, including Steaz, Xyience, Health-Ade and GoodBelly.
For its part, Cascadia Capital has completed more than 100 mergers or acquisitions ranging in size from $20 million to $500 million. Within beer, the company advised Cold Spring Brewing on its sale to Brynwood Partners, a private equity firm, and worked with Seattle Cider and Two Beers Brewing on its sale to Agrial, a French agribusiness cooperative. It also helped Humm Kombucha in its Series B investment round, which was led by VMG Partners.
“The combination unites two highly successful and specialized investment banking practices, accelerating our shared strategic growth initiatives and enhancing Cascadia’s coverage of the consumer landscape,” Cascadia CEO Michael Butler said via a press release.
Speaking to Brewbound, Ziebold said he believes dealmaking within craft beer could pick up over the next two years, despite the fact that the pace of transactions has slowed and “migrated” to smaller, more structured arrangements in 2017.
“The velocity and size of deals declined in 2017, and it was the advent of a restructuring cycle,” he said. “Larger deals for super-regional or national breweries are few and far between, and we are seeing the beginning of distress in craft beer.”