Sam Adams And Dogfish Head To Merge In $300 Million Deal

Sam Adams And Dogfish Head To Merge In $300 Million Deal

The Boston Beer Co., which produces Samuel Adams, is acquiring Dogfish Head in a deal worth $300 million, the companies announced Thursday. In 2015, Constellation Brandsbought Ballast Point, and that same year Lagunitas sold a 50% ownership stake to Heineken before selling the other half two years later.

But what strikes me more is the the blending of brewing styles.

It also looks like Dogfish Head fans need not worry about the brand suffering any local fallout.

While the coupling of the two operations will give them a leading position in the high-end US beer market and better position them to compete with global beer conglomerates, the brewers will retain their status as an independent craft brewery when merged. In fact, Mariah and I believe so much in the future of our merged companies that we are all in, and personally we're reinvesting almost all of the proceeds back into the combined entity.

Boston Beer (NYSE:SAM) had its price target hoisted by equities researchers at Macquarie from $325.00 to $365.00 in a report issued on Friday, BenzingaRatingsTable reports. "This is a formidable combination of brands, incredible brewing talent and leaders who remain 100 percent focused and committed to the long-term health of our breweries and growing the beer industry".

One interesting aspect of the deal is that it combines two brewers that are regionally strongest in the northeast near their home bases: Boston Beer from MA and Dogfish Head from Delaware. "We expect that we'll see more consolidation in the craft industry over time, and we'll be in the best position to take advantage of those changes". From the launch of craft brewing to 2019 Sam Adams continues to be the most award-winning craft brewer in the world.

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Koch founded his company in 1984, and since then it has grown to include brands such as Angry Orchard Hard Cider, Twisted Tea and Truly Hard Seltzer.

Dogfish Head has also been stuck of late. The newly combined company will maintain a significant presence in Delaware. Dogfish Head shareholders will also get $173 million in cash, primarily for the DE company's financial investors, including that private equity firm, LNK Partners.

Calagione and his family will receive about 406,000 shares of Boston Beer stock, valued at $128 million based on the average closing price of the shares over a 10-day period ending on Wednesday. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at this hyperlink.

Dogfish Head is on pace to sell almost 300,000 barrels for 2019, translating to net sales of at least $110 million for the year. Net sales for the full year 2019 are expected to be between $110 and $120 million.

"More than a dozen of our peers have sold to worldwide conglomerates, others have come together through platforms bringing a handful of craft breweries together in roll-ups", the founders of Dogfish Head, Sam and Mariah Calagione, said in a statement.

The deal brings together the second largest craft brewer in the US, Boston Beer, with the 13 largest, Dogfish Head, according to figures from the Brewers Association.

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