Magic Hat founder on how Pyramid deal was a mistake and how he was forced out of company
Amazing read.
The die had been cast four years earlier, however, in 2006. Magic Hat was “rolling in dough” at the time, Newman recalls, and brought on a financial partner, Connecticut hedge fund Basso Capital Management, to help it acquire Pyramid Breweries for $25 million.
“When we did the Pyramid deal, I went from majority shareholder to minority shareholder and, in doing so, I gave up some rights,” Newman explains. “It seemed like a good idea at the time because no one knew that the economy was going to tank in 2008.”
When it did, the Pyramid deal went belly up. The bank that was financing it pulled out, and Basso was looking to unload Magic Hat “as quickly as possible,” Newman says.
He made one request: Do not sell the company to KPS Capital Partners, a private equity company that owns North American Breweries, makers of Labatt Blue, Genesee, Dundee and Honey Brown. Newman wanted an owner that would be a “good fit” for Magic Hat’s brand — “maybe a European brewery looking for a strong foothold in the American craft-brewing market.”
Check out the full story >> Magic Touch | Seven Days.
Hat tip to @hopfentreader.
Breweries: Alchemy and Science, Magic Hat Brewing
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