Oskar Blues has agreed to purchase Michigan’s Perrin Brewing Company, a smaller craft operation founded in 2011. The pickup may be the first in a series of investments for Oskar Blues, a top-25 craft brewery.
The acquisition is backed by investments from Fireman Capital Partners and former West Side Distributing owner, Keith Klopcic, according to Oskar Blues’ founder, Dale Katechis. He said the transaction is expected to close within the next 60 days.
Terms of the acquisition were not disclosed but Katechis credited Klopcic, who recently sold his interest in West Side Distributing, with helping to orchestrate the deal. Perrin sold upwards of 14,000 barrels in 2014 and is on tap at more than 700 accounts in Michigan, according to a press statement.
The deal may be the first in a series of investments in other breweries for Oskar Blues. The company has brought in an undisclosed amount of investment from Fireman Capital, a Boston-based family office that already has investments in two Utah-based craft brewers — Wasatch and Squatters, which make up the Utah Brewers Cooperative.
Katechis wouldn’t comment on Fireman’s direct financial interest in Oskar Blues, saying only that the company’s new acquisition strategy required “funding” it couldn’t obtain from its previous banking partners.
“It was odd to hear banks pass us off because they couldn’t fill our needs,” he said. “We began to look for another opportunity and another ‘bank,’ essentially, to help fund these projects. When we found Fireman, we found an aggressive group that had experience in the beer industry and it was different than anything we had been exposed to from a banking perspective.”
Katechis said a deal between the two companies closed in early March; while he would not elaborate, sources familiar with the transaction have described the investment as a “special purpose fund,” and a vehicle for acquiring more craft brands.
“Fireman appreciated our acquisition strategy and have given us an opportunity to grow the business without ‘selling out,’” Katechis told Brewbound.
Prior to finalizing a deal with Fireman, Oskar Blues shopped an investment deck to a number of private equity, family-office and strategic buyers that had “strict guidelines on what they could invest,” Katechis said.
Ultimately, Katechis said he selected Fireman because the firm “felt more like a family-office that held similar beliefs” and they believed in his plan for acquiring craft breweries.
“This is an investment in our strategy,” he said. “I don’t have any fears that this is a slash and burn. They have a long-term vision.”
Katechis’ said he described his acquisition strategy as a way of “taking collaborations to the next level,” and that he’s looking to purchase like-minded breweries in a variety of regional markets.
“As we started thinking about and seeing the success of opening the brewery in Brevard — which essentially paid for itself in a couple of years as we capitalized on being local in North Carolina — it really drove us to an M&A strategy,” he said. “I think the gloves are starting to come off out there and I think this will give us a better chance to win. We love opportunity and we hate to see it pass by.”
Katechis said he envisions a future where Oskar Blues purchases as many as six craft breweries all around the country, but said it is important to focus on integrating Perrin’s company culture with Oskar Blues’ before they take advantage of new opportunities.
“We have been distributing beer in Michigan for a few years,” said Katechis.“Keith [Klopcic] is one of those guys that we got to know through our distributor relationship and we genuinely looked forward to our meetings and having beers afterwards. On one of our trips, he took us out to Perrin for beers and we fell in love with the place and the people.”
That was last fall. Shortly thereafter, Oskar Blues brewed a batch of beer with the company and discussions about a possible acquisition began moving forward.
“The idea of hyper local is becoming more and more relevant to the consumer and obviously affecting the entire industry’s business models,” said Katechis. “We want to continue to be aggressive and strong and in our minds, this is our way of having one more card that we could play and it is real and genuine.”