Smuttynose Sold to New Hampshire VC Firm

From left: Jake Broom, Chris Broom Jr. , Jason Frechette, Andrew Hart, Rich Lindsay, Joanne Francis and Peter Egelston.

Despite initially reaching a verbal agreement to sell Smuttynose Brewing to a New Hampshire entrepreneur, Provident Bank has found another buyer for the distressed craft brewery.

Runnymede Investments, a North Hampton-based venture capital and investment firm, has agreed to purchase the struggling brewery and restaurant for an undisclosed sum.

The deal for Smuttynose comes exactly one week after the Portsmouth-area beer company was sold at a public auction to Provident Bank, its lead lender, for $8.25 million.

In a press release announcing the sale, Provident Bank president Chuck Withee said Runnymede Investments “has the resources to take this popular brand to new heights.”

“Smuttynose fans and employees should rest assured that this local treasure will not only survive, but will thrive in the coming months and years ahead,” he said.

Runnymede said it plans to make several investments in the beer company in the coming months, including hiring more sales reps and installing a canning line.

“[Former Smuttynose owners] Peter [Egelston] and Joanne [Francis] have assembled a great team and an impressive production facility,” Runnymede owner Chris Broom Jr. said via the release. “We’re taking a long view and plan on making immediate investments to strengthen the brand and return to growth.”

To lead Smuttynose, Runnymede has tapped former Boston Beer Company executive Rich Lindsay to serve as CEO.

Lindsay, who briefly served as the CFO of Massachusetts-based Night Shift Brewing before parting ways with the company last November, will work with Peter Egelston during the transition process.

“I’m very happy to be leading this team and building upon the Smuttynose brand’s legacy,” Lindsay said via the release. “Our immediate priorities are focused on growth.”

In the release, Egelston, who currently serves as president of the brewery, added that Smuttynose’s 66 employees are “eager to turn the page and start our next chapter”

“We are pleased to know that we’ll be working with investors from within our own community, people who are familiar with our brand and appreciate what we’ve built here,” he said. Joanne Francis, Egelston’s partner, added: “We’ve built a strong foundation with a lot of untapped potential, but circumstances over the last couple of years have held us back. With a strong partner who understands that potential, there’s no limit to what we can now accomplish. We can’t wait to roll up our sleeves and get started!”

During last week’s auction at the brewery, Broom and other members of Runnymede’s team were among the eligible bidders.

Derek Durbin (left) and Norman Rice

As Brewbound previously reported, New Hampshire tech entrepreneur Norman Rice had emerged as a potential buyer.

At the time, Rice told Brewbound and other news outlets that he’d reached a verbal agreement with Provident Bank to purchase the brewery. However, the bank continued to solicit offers throughout the early part of this week and ultimately rejected Rice’s bid.

In a statement to Brewbound, Rice expressed disappointment about not being able to finalize a deal for the brewery. He added that on Thursday, March 15, he made Provident a cash offer above his initial bid of $8.25 million in order to close the deal immediately.

“I am deeply disappointed in the outcome as I believe in the brand Peter and Joanne built and was looking forward to continuing their legacy,” Rice said in a statement provided to Brewbound Friday morning. “I am proud of the team I assembled that would ensure the continued operations of Smuttynose as a New Hampshire-based business and I wish them well in the future.”

The sale to Runnymede ends a tumultuous start to 2018 for Smuttynose. In mid-January, Provident Bank announced that the 24-year-old craft brewery would be sold at a foreclosure auction. At the time, Egelston cited overleveraging of investments and missed growth projections due increasing competition from other craft brewers.

Smuttynose’s issues tied back to an investment to build a 32,000 sq. ft., LEED-certified gold production facility with a capacity to produce 75,000 barrels. The beer company was only able to fill about 50 percent of its capacity, though, and sought contract brewing arrangements with other New England breweries, including Night Shift.

Sales of Smuttynose products declined 8 percent in 2016 to 48,000 barrels, and dropped even further to 35,000 barrels in 2017.

A press release with additional details is included below.

Runnymede Investments LLC Acquires Smuttynose Brewing Company From The Provident Bank

North Hampton, New Hampshire Based Investors Promise a Bright Future for NH’s Best-selling Craft Brewer Hampton, New Hampshire – The Provident Bank, which purchased Smuttynose Brewing Company at a foreclosure auction on March 9, has sold the company to North Hampton-based Runnymede Investments for an undisclosed amount.

Says The Provident Bank President Chuck Withee, “The Provident Bank is impressed with the Runnymede team on so many levels. They are passionate business leaders and great all-around people, who are part of our Seacoast community. Runnymede has teamed up with a very professional brewery executive, Rich Lindsay, who knows Smuttynose founder Peter Egelston and the team very well and there is deep, mutual respect. Runnymede Investments has the resources to take this popular brand to new heights. Smuttynose fans and employees should rest assured that this local treasure will not only survive, but will thrive in the coming months and years ahead.” Withee added, “Make Mine A Smutty!” referencing the popular tagline. The Provident Bank was the lead lender and was the high bidder at the auction with a bid of 8.25 million dollars.

Chris Broom Jr. of Runnymede Investments expressed enthusiasm for having the opportunity to invest in New Hampshire’s largest craft brewery. “Peter and Joanne have assembled a great team and an impressive production facility. We’re taking a long view and plan on making immediate investments to strengthen the brand and return to growth. We’re also pleased to be adding Richard Lindsay as Chief Executive Officer to the team. Rich is a seasoned industry veteran having held executive roles with Samuel Adams, Tuthilltown Spirits, Night Shift Brewing as well as consulting roles with numerous startups in the alcoholic beverage industry.”

“I’m very happy to be leading this team and building upon the Smuttynose brand’s legacy,” commented Mr. Lindsay. “Our immediate priorities are focused on growth. We’re making plans to add personnel to our sales team and provide them with resources to make them effective in this competitive market. We also plan to make an investment in a canning line that will allow us to participate in a growing segment of the craft beer market.”

Egelston and Lindsay will be working closely to ensure a smooth transition and to shape the next generation of sales and marketing for the brewery.

Founded in 1994, Smuttynose Brewing Company, employs 66 people and generates more than 10 million dollars in annual revenue. It is the Granite State’s leading craft brewery and produces some of New England’s most popular craft beers. The sale includes the Smuttynose brand, its state-of-the-art, LEED – Gold certified facility on the historic Towle Farm in Hampton, and Hayseed Restaurant located next to the brewery on the picturesque 13-acre campus. The brewery is among the largest in New England, capable of producing 75,000 barrels a year.

Peter Egelston, President and founder of Smuttynose shared the news with the brewery’s staff. “All of us here are Smuttynose are eager to turn the page and start our next chapter. We are pleased to know that we’ll be working with investors from within our own community, people who are familiar with our brand and appreciate what we’ve built here.”

Egelston’s partner, Joanne Francis, is relieved that the future is no longer in limbo, saying, “A company like Smuttynose doesn’t just pop up overnight. Our culture and reputation for quality are the result of decades of work, devotion and creativity. We’ve built a strong foundation with a lot of untapped potential, but circumstances over the last couple of years have held us back. With a strong partner who understands that potential, there’s no limit to what we can now accomplish. We can’t wait to roll up our sleeves and get started!”

There has been no disruption in the transition. The brewery and Hayseed Restaurant continue to operate, as well as all planned events on site. They welcome visitors and patrons.

Runnymede Investments is a family owned and operated investment firm headquartered five miles from the Smuttynose Brewery in North Hampton. Runnymede specializes in real estate, private equity, and venture capital.

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