Add Boston-based Fireman Capital Partners to the list of investors developing a taste for craft beer.
The group, which is chaired by former Reebok owner Paul Fireman, has purchased a majority interest in Utah Brewers Cooperative.
Though not quite a household name, Utah Brewers Cooperative is the result of a 2000 merger between two Utah-based craft brewers, Wasatch Brewery and Squatters Brewing. The brands currently share a production facility in Salt Lake City and are distributed in 12 mostly western states. They are ranked as a top-50 craft brewer by the Brewers Association, having produced 37,000 barrels in 2011.
Both Wasatch – which was founded by Greg Schirf in 1986 – and Squatters – founded by Peter Cole and Jeff Polychronis in 1989 – operate separate brewpub businesses. Those businesses will be rolled together through the Fireman deal.
Cole said discussions with Fireman Capital Partners began earlier in the year, after the company spoke with other potential investors.Ultimately, it was Fireman’s attention to consumer brands – including the all-natural juice line Evolution Fresh (which they sold to Starbucks in 2011) – that attracted Utah Brewers Cooperative to the group.
“They have a knowledge and passion for the consumer segment,” he said. “We did extensive due-diligence. We met them and spoke to other companies that they had been involved with and it became clear to us that they are partners that could really help us grow our brands.”
Press materials indicate that in addition to Schirf and Polychronis, Squatters operating partner Joe Lambert will also maintain equity ownership in the combined company.
“We are all very passionate about the business,” Cole told Brewbound.com. “We are very excited about being involved in this growth process and fully intend to be involved in it for years to come.”
Cole said there are immediate plans to increase brewing capacity in 2013 and explore new distribution territories. The exact investment amount was not disclosed.
The full press release is below.
SALT LAKE CITY & BOSTON – Squatters/Wasatch and Fireman Capital Partners today announced that the companies have entered into an agreement under which Fireman Capital will make a significant investment in the combined business, including the award-winning Squatters and Wasatch craft brewery and brewpubs. The investment will support further expansion of the Squatters and Wasatch portfolio of craft beers, distribution growth, brand and marketing initiatives, and the continued success and expansion of the complementary brewpub business.
The Squatters and Wasatch brewery is one of the top 50 craft brewers in the country. Founded over twenty years ago by Utah’s craft brewing pioneers, Squatters and Wasatch are industry leaders and now sell beer in 12 states. Combined, Squatters and Wasatch beers have won 17 World Beer Cup awards, a number surpassed by only two other top-50 U.S. craft brewers and a distinction that highlights the “statement-making” nature of their beer. The investment by Fireman Capital also includes five high-volume brewpubs and restaurants in Salt Lake and Park City.
Peter Cole, Founding Partner of Squatters, said, “This investment opens the door to the next level for Squatters and Wasatch, and provides the financial firepower and expertise we need to meet rapidly growing demand for our beer and to reach new markets. For beer lovers it means greater opportunity to enjoy exceptional craft beer, and a great meal at our brewpubs. Importantly, our core mission of brewing world-class beer — and our steadfast commitment to a healthy community and environment — remains unchanged. Squatters and Wasatch have always been about brewing beers you can believe in, and we look forward to giving more people the chance to taste our brews.”
Greg Schirf, the founder of Wasatch Brewery, will continue to manage brewery operations for the company. Joe Lambert, Operating Partner for Squatters since 1996, will continue to oversee the restaurant business. Peter Cole, Jeff Polychronis, Joe Lambert and Greg Schirf will all maintain ownership in the combined company.
Schirf said, “We are excited by Fireman Capital’s support of our brands, our beer, and our tremendous business potential. Our brewery has grown rapidly over the years, with recent penetration of large, attractive markets outside Utah. We look forward to our partnership with Fireman Capital Partners and to the resources and expertise they bring to the table.”
Lambert added, “We remain 100% committed to the goals that have been the core of our success — to provide our customers world-class handcrafted beer and the highest quality food in a warm, friendly environment in our brewpubs. We embrace the Triple Bottom Line philosophy of People Planet Profit, sourcing healthy ingredients and using environmentally friendly products and services from within the local region.”
Dan Fireman, Managing Partner of Fireman Capital, said, “We are thrilled to support Joe, Greg, Jeff, Peter and the entire Squatters/Wasatch management team as they continue to grow the business. Built on a combination of outstanding beer, a steadfast commitment to the environment, community, local sourcing and the best ingredients — and set apart by unique, witty and cheerfully subversive branding — Squatters/Wasatch is exactly the kind of successful, market-disrupting company we seek at Fireman Capital. Craft beer is a large, rapidly growing industry where companies offering exceptional products and brands like Squatters and Wasatch enjoy enormous potential. We plan to leverage our financial and deep operational resources to assist in growing the brewery through broadening and solidifying its regional distribution network while continuing to expand the brewpub business.”
Craft brewing is a $1.1 billion industry in the U.S., growing from 3% of total beer volume in 1994 to 6% today — and is expected to increase to 10% of total U.S. beer volume by 2016. Over the past three years, the Squatters/Wasatch brewery has grown rapidly to meet robust demand from both in-state and out of state markets. The brewpub business has enjoyed significant growth and strong profitability as well.
Fireman Capital Operating Partner Robert Spellman, a Director of Au Bon Pain and former CFO of Staples and Yankee Candle, will oversee the investment for Fireman Capital. Michael Schlow, a Fireman Capital advisor and leading American restaurateur, will contribute his extensive expertise in restaurant management and menu development. Doug Epstein, owner/manager of Horizon Beverage, one of the largest alcohol and spirits distributors in New England, will serve as a valuable advisor to the business as it grows its distribution footprint.
The investment is expected to close shortly pending the completion of customary closing conditions.
About Squatters and Wasatch Beers
Jeff Polychronis and Peter Cole, founders of Squatters, opened Salt Lake’s original brewpub in 1989, and currently operate three pubs and a wine and ale house. In 1986, Greg Schirf owner and operator of Wasatch Beers and Wasatch Brewpub opened Utah’s first microbrewery in the resort town of Park City. In 2000 Squatters and Wasatch merged their microbrewery operations for draft and bottle production creating Utah Brewers Cooperative.
Utah Brewers Cooperative is the only Utah brewery represented on the Brewers Association list of the Top 50 Craft Brewing Companies in the Country. Squatters and Wasatch bottled and draft beers are available in liquor stores, restaurants, clubs, hotels, resorts, grocery and convenience stores throughout Utah, Wyoming, Nevada, Arizona, New Mexico, Texas, Wisconsin, Louisiana, Minnesota, South Dakota, Nebraska and Oregon. Combined, the Squatters and Wasatch team employs over 300 people.
About Fireman Capital Partners (FCP)
Fireman Capital Partners invests in consumer-focused companies through both growth equity and buyout transactions. The private equity firm focuses on dynamic consumer businesses with revenues between $10 and $150 million, and who have a unique vision and strong management. Fireman Capital leverages its capital, extensive relationships, and deep operating expertise to add substantial value.