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Morning Briefing for pub, restaurant and food wervice operators

Tue 15th Mar 2016 - BrewDog plans $50m US crowdfunding push
BrewDog plans $50m US crowdfunding push: BrewDog, which plans to open its US headquarters in Canal Winchester, Ohio, this summer, has filed papers with the US Securities and Exchange Commission showing it expects operations in the US to eclipse those in the UK with 1.5 million barrels of annual production, the Columbus Dispatch has reported. The company will offer slightly more than one million shares of stock in a crowdfunding program to raise up to $50m. BrewDog is spending $30m on the headquarters and brewery it is building in Canal Winchester. BrewDog hopes to build enough business in the US to triple the size of its 100,000-square foot plant in Canal Winchester. Plans outline distribution to 20 states this year before expanding to all 50 states and Canada. It also wants to build a network of brewpubs across the US and add a second brewhouse to produce 1.5 million barrels a year. “That is more (barrels) than all the breweries in the state of Ohio are brewing and that includes our Sam Adams and Great Lakes Brewing Co breweries,” Mary MacDonald, executive director of the Ohio Craft Brewers Association told the Columbus Dispatch. “It seems highly ambitious in an awesome sense.” The US stock offering would dwarf all of the fund-raising BrewDog has done in four different “Equity for Punks” phases. The details have not been released yet, but BrewDog will sell shares amounting to ownership of just over 14% of its US operation, giving the US business a value of about $350m before it’s brewed any beer. The mechanism for selling these shares is new in the US. It was created as part of the Jumpstart Our Business Startups Act, or JOBS Act, and approved it last year. It gives companies the right to sell up to $50m in shares online to non-institutional investors. The minimum purchase is two shares for $95, the same as the most recent phase of BrewDog’s fund-raising campaign in the UK. MacDonald thinks BrewDog’s US crowdfunding will find a huge fan-base. “We have a larger craft beer audience (than in the UK),” MacDonald said. “BrewDog is hugely popular. They have a big following thanks to their television show. I have a friend who is a huge fan and the minute they release (shares of the US operation) he will be totally on that.” Kendall Almerico, a Florida-based lawyer who specialises in crowdfunding and is representing BrewDog, calls the share offering a “mini-IPO”. The law in the US also allows companies to advertise the stock offering. “Private companies have never been allowed to do anything like this before,” Almerico told the Columbus newspaper. “They were mostly limited to raising money from the rich and well-connected before this law went into effect last year.” In the filing, BrewDog said it plans to use almost half of the proceeds from the stock offering, $22.5m, to open brewpubs. People who invest in BrewDog will be able to buy and sell shares privately or via some future trading platform, but that has not been finalised yet, Almerico said. 


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