Aphria Inc. will acquire SweetWater Brewing Company, one of the largest independent craft brewers in the United States based on volume.
Beginning with the flagship 420 beverage offerings, SweetWater has created an award-winning lineup of year-round, seasonal and specialty beers, a portfolio of brands closely aligned with a cannabis lifestyle.
The approximately $300 million acquisition has been unanimously approved by Aphria's Board of Directors and is expected to close before the end of December 2020. Aphria expects this acquisition to be immediately accretive to EBITDA and diluted earnings per share.
"Our strong balance sheet and access to capital have enabled us to enter the U.S. through this strategic and accretive acquisition,” said Irwin D. Simon, Aphria's chairman and CEO. “We will establish and grow our U.S. presence through SweetWater's robust, profitable platform of craft brewing innovation, manufacturing, marketing and distribution expertise. At the same time, we will build brand awareness for our adult-use cannabis brands, Broken Coast, Good Supply, Riff and Solei, through our participation in the growing $29 billion craft brew market in the U.S. ahead of potential future state or federal cannabis legalization. We look forward to building upon the strengths of each of our respective and complementary brands, diversifying our product offering, broadening our consumer reach, and enhancing loyalty with consumers."
Founded in 1997 by Freddy Bensch, SweetWater has established strong distribution across 27 states plus Washington, D.C. and has ample capacity to support distribution efforts into new geographies, with limited capital expenditure. From its state-of-the-art brewery in Atlanta, Georgia, SweetWater produces a balanced variety of year-round and seasonal specialty craft brews, with SweetWater beverages available in approximately 29,000 off-premise retail locations ranging from independent bottle shops to national chains. SweetWater's on-premises business allows consumers to enjoy its varietals in more than 10,000 restaurants and bars.
In addition to its traditional distribution footprint, SweetWater 420 Extra Pale Ale and IPA are served on all Delta flights nationwide plus internationally, totaling more than 50 countries across six continents which has served to extend SweetWater's brand reach on both a national and international level.
SweetWater also hosts an annual music festival, "SweetWater 420 Fest," that has evolved into one of the largest and most anticipated music festivals in the U.S., increasing brand awareness nationwide. In 2019, the 420 Strain G13 IPA became the top new craft brand in the U.S. in the first 12 months after its launch. In addition to branding, SweetWater's various 420 strains of craft brews use terpenes and natural hemp flavors that, when combined with select hops, emulate the flavors and aromas of popular cannabis strains, to appeal to a loyal consumer base that made the 420 Strain G13 IPA its No. 2 best-selling beer and No. 1 best-selling new craft beer in the U.S.
For the year ended Dec. 31, 2019, SweetWater Brewing Company generated net revenue and adjusted EBITDA of $66.6 million and $22.1 million, respectively, and production volume increased 7 percent year-over-year to nearly 261,000 barrels, twice the growth rate of the craft beer market nationally, according to the Brewers Association.
"We are excited by the opportunity to join a leading global cannabis company and build a successful future based on the strengths we both bring to this combination,” said Freddy Bensch, SweetWater's founder and CEO. “Our 420 brand offerings and SweetWater 420 Fest complement Aphria's cannabis business and create mutual opportunities for accelerated expansion into other cannabis- and beverage-related products in the U.S. and Canada. We will leverage our growing beverage offering and build an even stronger, more diversified company with a continued focus on authentic and distinctive brands."
Want more legal cannabis market news and information?
Join Cannabis Products on Facebook, Twitter, and LinkedIn today!
Report Abusive Comment