Just two and a half years after the drinks accelerator, Mighty Craft, acquired the Adelaide Hills Group for $47 million, it has sold the remaining brands – Adelaide Hills Distillery (78 Degrees gin) and Mismatch Brewing Co – to a consortium of pubs and high-profile industry investors for $7.2 million. It sold Hills Cider Co, also part of the Hills portfolio to essentially the same group last year for $3 million.
Since its aggressive acquisition program in 2021 – Adelaide Hills Group, Jetty Road Brewery, Ballistic, Slipstream Brewing, Sparkke Investment – and investment in the Inspired Unemployed’s Better Beer brand, Mighty Craft is now scrambling to sell assets to stay in business.
When Mighty Craft acquired the group it paid $27 million cash and $20 million in shares at 35c apiece.
At the end of 2023, the company has listed eight brands as held for sale, resulting in a $40.7 million non-cash impairment presented as discontinued operations. Slipstream Brewing Company, Mighty Hunter Valley, Kangaroo Island Spirits, Hills Distillery, Mismatch Brewery, Lot. 100, and Foghorn Brewery were all listed as held for sale.
In February, it reached a payment plan agreement with the ATO to pay its outstanding liability of just over $8.8 million on 31 July.
It also reached agreed terms with its lenders and creditors, including an extension of a bridging loan with the Swiss based family office for 50 per cent of its loan balance, being $2.5 million and due on 17 August.
Pure Asset Management has expressed support for the divestment program, but it is contingent on how much progress the company makes in delivering on it.
On news of the sale last week, its shares were trading at 1.5 cents and the company valued at $6.57 million.
The consortium that acquired Mismatch and Adelaide Hills Distillery (78 Degrees gin), United Publicans Group (UPG), consists of 15 pub groups that have more than 200 venues and high-profile industry investors. Former CEO of Carlton & United Breweries (CUB), Peter Filipovic, is one of the parties.
The deal includes IP, licences, trading names and contracting arrangements, plant and equipment, and inventory.
Filipovic told The Shout that UPG was essentially the same group that acquired Hills Cider Co and Jetty Road Brewery from Mighty Craft last year (which was referred to as Jetty Road Publican Group) for $3 million apiece.
He said members in the group were at the top end of the market, with venues in Victoria, New South Wales, Queensland, and South Australia.
“The group has the intention to have these brands within their outlets as well as grow the brands without. It is quite difficult to get into taps in the on-premise and this group enables us to get distribution in over 200 venues, without any kind of business agreement in place.
“We will invest in the brands, and then build the brands through what I would call the brand champions, which are out of the United Publicans Group. Each of the brands has an incredible story and these two brands in particular have good brand equity and our assessment is that they have a good ability to grow, rather than just stagnate,” Filipovic said.
