Last July, when Harpoon Brewery co-founder Rich Doyle announced he would step down as CEO and sell his interest in a beer company he’d helped to build over 28 years, many in the space wondered what his next move would be.
Less than nine months later, Doyle’s future in beer is much more clear.
Aided by significant capital backing from San Francisco-based private equity firm Friedman, Fleisher & Lowe (FFL), Doyle has established Enjoy Beer LLC, an acquisition vehicle and craft beer consortium that he hopes will one day become a publicly traded company with multiple craft brands under its control.
The group’s first purchase is Louisiana’s Abita Beer, a top-25 regional player whose growth slowed to just 3 percent in 2014 as the 29-year-old brewery butted up against capacity constraints.
Specific terms of the transaction were not disclosed, but Doyle, in a phone conversation with Brewbound, said there are three primary components of the deal: liquidity, growth capital and continued ownership.
As part of the acquisition, Doyle said, Abita shareholders will not only be able to take some chips off the table, but also remain equity shareholders in the newly established Enjoy Beer LLC.
That company, Doyle said, will act as both an acquirer and an experienced back office that can help independent brewers with “marketing, sales, purchasing, logistics and finance in an effort to compete with large-scale corporate competitors.”
“What we are trying to do is help the regional and super regional breweries go to market and compete against national brands,” he said. “You have some very strong players, playing very big in craft beer. You better be ready with trained employees, have the resources and the personnel or else you are going to get dusted by the big guys.”
The group’s credo: be competitive while remaining independent.
“We have put together a team of professionals and veterans who can help these companies,” he said. “That’s part of it and part of it is having a financial partner that can provide capital – growth capital and liquidity capital. What we facilitate is not only the collaboration and the resources, but the eventual determination of one’s own fate by being an independent company.”
Doyle said he is specifically targeting larger regional breweries in the top 50 and smaller but fast-growing brands in the top 75. He hopes to have five craft beer breweries under the Enjoy Beer umbrella before 2020, at which point the company may consider an IPO.
“There are top 20 craft breweries that could certainly be public companies, but they might not have the scale to do it well,” he said. “If you want to be a public company, you need to have a certain scale, absolutely.”
Doyle added, “If you think about having five excellent brands together, don’t you think that might be a company someone might want to be a part of?”
So is Doyle’s former company, Harpoon, on the short list?
“I think it is a great company,” he said. “If they were interested in talking to us, I’d be interested.”
The inspiration for Enjoy Beer LLC was actually born out of Doyle’s own experience searching for investors and buyers interested in Harpoon. Doyle, along with business partner Dan Kenary met with a wide range of potential acquirers, including private equity firms and strategic buyers, before ultimately agreeing to transfer 48 percent of the company into an employee stock ownership plan (ESOP).
When that news broke, it was heralded as a win for employees of the Boston-based beer company – they’d just been gifted 48 percent of the business via an employee stock ownership plan. According to The New York Times, at least 40 percent of that came from Doyle.
Months later, Kenary, speaking to a group of entrepreneurs at our very own Brew Talks meetup in Boston, noted that Doyle was “more interested in a private equity or a strategic sale.”
“Rich made it clear that he was open to a transaction and looking for some liquidity,” Kenary said during the talk.
Doyle told Brewbound he is “investing significant personal resources” into the new enterprise.
“It is not everything that I own, but it is significant money and I have some skin in the game,” he said.
Potential purchase considerations will include a company’s eagerness to sell, the total investment amount, production output and geographic location, among other criteria, Doyle said.
Abita, ranked no. 21 on the 2014 Brewers Association list of top producing U.S. craft breweries, made more than 160,000 barrels of beer in 2014.