SEC Filing Indicates $90 Million VMG Investment in Stone Brewing

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There’s more private equity money flowing into the craft brewing industry, this time via consumer products-focused firm VMG Partners and popular San Diego beermaker Stone Brewing.

VMG — which specializes in food and beverage investments and has purchased stakes in entrepreneurial ventures like KIND Healthy Snacks, Pirate’s Booty, Justin’s and Spindrift, among others — will invest $89.5 million into a recently formed limited partnership called “VMG Stone Brewing Coinvestment,” according to a June SEC filing.

Nickie Peña, a spokeswoman from Stone Brewing, would not confirm a relationship between the two entities, saying only that Stone would “reach out soon,” with “more solidified details.”

Messages left for VMG founding partner David Baram and Kara Roell were not immediately returned as of press time.

Although the specific nature of the investment is still unclear, VMG Partners III, L.P., the firm’s most recent $500 million fund, is listed as a general partner in the filing. VMG Partners II, LLC, a $375 million fund that closed in June 2011, as well as Baram, Roell, and Michael Mauze, another VMG founding partner, are also named.

Also showing where the money is flowing: a separate but related entry on the website of international law firm Winston & Strawn LLP, which has represented VMG in previous transactions, characterizes VMG Partners’ “minority investment in Stone Brewing Co.” as a “recent victory.”

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Pena would also not confirm if all or part of VMG’s $89.5 million commitment would be used to help fund “True Craft,” an investment platform aimed at purchasing minority stakes in food and beverage companies that Stone Brewing co-founder Greg Koch unveiled at the end of April.

At the time of the initial True Craft announcement, Koch described the venture as a “craft beer investment company,” and said he had secured $100 million from a group of “independent investors.” Specific investors were not named at the time.

Both “equity” and “pooled investment fund interests” are listed as securities offered, according to the SEC filing, and a $500,000 minimum investment from outside investors is also noted.

The timing of at least part of the VMG transaction coincides with a flurry of activity amongst Stone’s executive ranks. On June 14, the company announced the departure of longtime brewmaster Mitch Steele. And on June 16, a lengthy interview with brewery co-founder Greg Koch was published to MarketWatch, a financial information website that routinely covers the craft segment.

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Koch himself is also planning to step down as brewery CEO and transition into a new role as executive chairman. That move was announced last September, but Stone has yet to identify a permanent replacement.

In recent months, Stone has spent more than $100 million to expand its operations both domestically and overseas. The company recently began shipping beer from its new $25 million Berlin brewery. And just last week, it tapped the first Stone IPA brewed at its $75 million brewing facility in Richmond, Virginia.

In addition to its new production facilities, Stone last month announced plans to expand its taproom footprint in California, adding a 10,000 sq. ft. pilot brewery and tasting room in Napa.

Brewbound will continue to follow this story as it develops.