E-Malt.com News article: USA, TX & CO: Oskar Blues to open third brewery in Austin by April 20

Oskar Blues — with breweries in Colorado and North Carolina — plans to add to its empire by opening a brewery in Austin, Texas, The Denver Post reported on September 24.

But the Longmont-based brewer is not stopping there.

The architect behind canned craft beer envisions operating more breweries across the nation and, perhaps by the end of this year, could select a location for a fourth production brewery.

"We're just on a tear," Oskar Blues' founder Dale Katechis said.

Austin, renowned for its live music scene, appeared to be a solid fit for the Oskar Blues concept, which grew out of a down-home Southern-style restaurant and music venue in Lyons, CO.

The 55,000-square-foot brewery, set to open by April 20, will produce beers across Oskar Blues' lineup and will have an initial production capacity of 30,000 barrels. That could grow to 100,000 barrels.

“Oskar Blues, which is expected to post revenues in the $55 million to $60 million range this year, has invested $43 million since 2012,” Katechis said.

Oskar Blues' annual production is expected to approach 200,000 barrels this year, and expansions are underway at the existing breweries in Longmont, CO. and Brevard, N.C.

This year, Oskar Blues played the role of suitor, acquiring Michigan-based Perrin Brewing for an undisclosed sum.

Helping to stoke the growth on the brew side of Oskar Blues' business was an investment by Fireman Capital, a Boston-based private equity firm.

Katechis declined to disclose the amount of the investment and would not say whether he retains a majority ownership stake. But he said Fireman Capital's money and industry expertise will help to grow the Oskar Blues brand "bigger, better, faster but with more efficiency."

"They see the craft beer world the same as we do," Katechis said. "We both had the mindset of building this platform within craft beer where we would build regional breweries of Oskar Blues to capitalize on shipping savings."

“The strategy includes finding locations for Oskar Blues breweries that fit well culturally and logistically and filling the gaps with acquisitions of smaller breweries,” Katechis added.

Those efforts will be conducted under the umbrella of Oskar Blues' holding company United Craft Brews, a limited liability company that raised $132.8 million this year, according to a March 16 U.S. Securities and Exchange Commission filing.

“It's a deal-heavy time for the booming craft beer industry. Within the past 12 months, there have been 17 liquidity transactions - among them "big beer"-led buyouts of craft breweries, private equity moves and the establishment of employee stock ownership plans,” said Kyle R. Leingang, an attorney at Dorsey & Whitney LLP in Southern California.

"From the buyer side of things, the Anheuser-Busch InBev and MillerCoors of the world smartly see that craft beer is getting very regionally focused, even hyper-local, and so they have been trying to focus their acquisitions around, making sure they have ownership around well-known and well-respected brands [in key craft beer hubs]", Leingang said.

“The deal flow - acquisitions and private equity investments - should continue to occur at a high rate,” Leingang said, adding he wouldn't be surprised to see other regional craft breweries go the route of Oskar Blues.

"For them to effectively get a return on their investment in certain geographies, it sometimes makes more sense to acquire a smaller brewery in that region rather than build from the ground up," Leingang said. "As long as it's a good fit culturally between those breweries, it can make sense."


25 September, 2015