Agrees to Acquire Labatt USA; Acquires Substantially All of the Assets of High Falls Brewing Company; Acquires Perpetual License for Seagram's Coolers Brands
New York, NY (February 23, 2009) -- KPS Capital Partners, LP (“KPS”) today announced the formation of North American Breweries, Inc., a national platform for investments and growth in the beer and malt beverage industries, as well as its first three transactions:
- An agreement to acquire Labatt USA from Interbrew International B.V., a subsidiary of Anheuser-Busch InBev (Euronext: ABI).
- The acquisition of substantially all of the assets of High Falls Brewing Company, LLC.
- The acquisition of a perpetual license for the Seagram’s Cooler Escapes and Seagram’s Smooth brands from Pernod Ricard USA, LLC.
Financial terms of the transactions were not disclosed.
Raquel Vargas Palmer, a Partner of KPS, said, “The formation of North American Breweries gives us an outstanding growth platform in the beer and malt beverage industries that is exceptionally positioned to create value for our investors. With the acquisition of the High Falls Brewery, we purchased one of the largest independent breweries in the United States with exceptional brewing capabilities, a committed workforce and a nationwide distribution network. With High Falls we also acquired the Genesee and Dundee brands, and a perpetual license for the Seagram’s Escape and Smooth brands, which range from historic to relatively young brands that will benefit from a renewed focus and investment.
"The acquisition of High Falls was the result of a complex, multi-constituency recapitalization and restructuring transaction," Ms. Palmer continued. "The hard work by many organizations and individuals to complete this transaction demonstrates the effectiveness of the KPS investment strategy. The transaction could not have occurred without the support of the City of Rochester and the County of Monroe and the commitment of its public officials. We also thank the International Brotherhood of Teamsters for their support and encouragement. "We are extremely excited to invest in the Labatt brands in the United States. We intend to continue to focus on the authenticity, taste and quality that one associates with this historic Canadian brand. "We intend to continue to grow North American Breweries aggressively, both organically and through acquisition of new brands and exceptional breweries," Ms. Palmer concluded.
James Pendegraft, President of Labatt USA, said, "KPS recognizes the significant value we have created in the Labatt brand by promoting superb products and maintaining a strong commitment to our consumers. We look forward to working with our distributors, customers, and employees to continue to build a very successful company."
The Labatt USA acquisition is subject to approval by the Department of Justice and customary closing conditions. It is expected that the transaction will be completed soon after the Department of Justice approval is received.
Financing for the acquisition will be provided by KPS Capital Finance Management LLC. Jenner & Block LLP acted as legal counsel to KPS and North American.
About Labatt USA
Labatt USA, based in Buffalo, New York is the exclusive marketer and seller of Labatt brand beer in the United States. The Labatt USA brands include the flagship pilsner, Labatt Blue, as well as Labatt Blue Light, Labatt Ice, Labatt Max Ice, Labatt Heritage Series, Labatt 50, Labatt Select and Labatt Blue Non-Alcoholic. The Labatt brand was founded in London, Ontario in 1847.
About High Falls Brewing Company
High Falls Brewing Company, based in Rochester, New York, is one of the largest and oldest continually operating breweries in the United States. High Falls is best known for its historic Genesee line of brands, as well as its Dundee Ales & Lagers family of craft brands, which includes the Original Honey Brown Lager. Additionally, through its Allied Brands division, High Falls is America's exclusive distributor of several imports including Steinlager from New Zealand, Toohey's New from Australia, Thwaites from the U.K., and Imperial from Costa Rica. High Falls also manufactures beer and other alcoholic and non-alcoholic beverages under contracts on behalf of other companies.
About KPS Capital Partners
KPS, through its affiliated management entities, is the manager of the KPS Special Situations Funds, a family of investment funds with approximately $21.8 billion of assets under management (as of June 30, 2024). For over three decades, the Partners of KPS have worked exclusively to realize significant capital appreciation by making controlling equity investments in manufacturing and industrial companies across a diverse array of industries, including basic materials, branded consumer, healthcare and luxury products, automotive parts, capital equipment and general manufacturing. KPS creates value for its investors by working constructively with talented management teams to make businesses better, and generates investment returns by structurally improving the strategic position, competitiveness and profitability of its portfolio companies, rather than primarily relying on financial leverage. The KPS Funds’ portfolio companies generate aggregate annual revenues of approximately $21.6 billion, operate 245 manufacturing facilities in 26 countries, and have approximately 64,000 employees, directly and through joint ventures worldwide (as of June 30, 2024, pro forma for the recent acquisitions of Sport Group and Innomotics which closed on July 8, 2024 and October 1, 2024, respectively). The KPS investment strategy and portfolio companies are described in detail at www.kpsfund.com.
