An Illinois-headquarter maker of industrial, commercial and residential kitchen appliances has bought into the brewing equipment business.
The Middleby Corporation today announced the acquisition of CM Brewing Technologies LLC, the parent company of California-based brewing system maker Ss Brewtech.
Financial terms of the deal, which closed Friday, were not disclosed. However, Ss Bretwech will “operate as an autonomous business unit” within Middleby, according to a press release.
“Ss Brewtech provides a best-in-class craft brewing platform, enhancing our current beverage portfolio,” Middleby CEO Tim FitzGerald said via the release. “Craft brewing, including on-site brewing in bars and restaurants, is growing in popularity and Ss Brewtech is well-positioned to benefit from this trend.”
FitzGerald added that the company envisions “future growth opportunities” for Ss Brewtech by leveraging “existing Middleby customer relationships and global distribution channels.”
The acquisition of Santa Ana, California-based Ss Brewtech marks Middleby’s fourth transaction of 2019, but the publicly traded company’s first acquisition within the beer space.
Ss Brewtech, which was founded in 2013 by Curt Kucera and Mitch Thomson, has manufactured hundreds brewing systems for homebrewers and craft breweries, including Brooklyn Brewery, Allagash, Dogfish Head, Oskar Blues, Lawson’s Finest Liquids, Trillium, and Russian River, among others. According to the release, the business generates $20 million in annual revenue.
Speaking to Brewbound, Thomson said Ss Brewtech’s ownership group, which included partners Jake Kucera and Michael Fabian, began exploring a sale in late December, and the decision to transact was driven by a desire to “turbo charge the business.” He added that selling to Middleby was attractive due to its willingness to allow subsidiaries to operate independently.
“For us, it’s really more of the same, but we get more resources on a bigger scale,” Thomson said.
Middleby will provide Ss Brewtech with additional sales channels, bulk purchasing power and the opportunity to partner with other companies under its umbrella, Thomson said, adding that Middleby will retain all of Ss Brewtech’s more than 30 employees.
Moving forward, Ss Brewtech will continue its now year-long expansion into manufacturing equipment for companies beyond the beer space, including spirits, cold brew coffee, kombucha and extracts, Thomson said.
“We’re looking at all of them,” Thomson said. “And we’ll just continue building out our line and product suite for homebrewing, which is still a really big part of our business focus.”
The sale of Ss Brewtech comes seven months after the collapse of Canadian brewing equipment manufacturer Diversified Metal Engineering, which was purchased and eventually resurrected by CIMC Enric Tank & Process B.V. earlier this year. DME’s fall into receivership left hundreds of breweries that had paid millions of dollars in deposits in limbo.
The financial turmoil surrounding DME left many brewery clients of other companies, including Ss Brewtech, skittish about fronting thousands, if not millions, of dollars in deposits, Thomson said. Today’s transaction, he said, should allay those fears when dealing with Ss Brewtech.
“You’ve got the backing of a large public company that has some brands that have been around for like 100 years, so I think people see that and there’s definitely a lot higher comfort level writing your check to Middleby,” he said. “I think there’s a lot of financial stability there.”
For its part, Middleby reported a 17.4 percent increase in net sales, to $686.8 million, during its first-quarter financial results released in May. On Monday, the company’s stock (MIDD) closed the trading day down 0.25 percent, at $130.77.