Ballast Point Files Paperwork for IPO

I don't understand the love for that brewery from the general BA community. They are basically another Rogue brewing company - a brewery that gets a lot of flack on here (wack label graphics, ok to decent beer at high prices that don't justify their purchases, etc.....)

 

The beer is very good. Next question.

 

Eh, I think their label art is a lot better than Rogue, and their highlights are much higher. In that comparison, anyway.

This is probably shrewd move, what with the larger development of the spirits line, and the introduction of canned cocktails. If they're planning to make that a big part of what the business looks like, the influx of capital from even a moderate IPO would be fantastic and, depending on how creatively they work with their accountants, could leave their major decision makers as is.

EDIT: typos and whatnot.

 

Interesting. I suppose I'll have to invest.

 

I know it doesn't rule out the possibility down the road, but I'd rather see breweries like this declare an IPO and gain foothold for good beer than to see them be bought out by ABInBEV.

 

I'm not an industry person, but I am an economist! An IPO is largely going to be about an influx of capital up front, and then action to sustain/grow those share prices per duty to the investor. So, generally, you'd see IPOs more in the case of expansions or other liquid capital prioritizing issues. In this case I could see expansion of both the "traditional" brewery operation and a growth of the spirits line, offering investors a little bit more diversification. Boston is publicly traded, and look at their success branching into non-beer markets (Angry Orchard and Twisted Tea are still both growers, IIRC).

AB-InBev, SABMiller, etc, would likely prioritize buy outs of operations that are either consistent in shelf space sales adjusting for inflation, growth, etc, or those who are growing in their primary markets. This allows takeover at a juncture where extra production capacity that already exists is crucial, along with the inherent QC.

So, to me at least and I'm fine for someone to string me up for being an idiot, the situations where a company would consider an IPO versus buyout would be a bit different. If it's a retirement schema for a founder, well...then things could get murky. And this is all simplified anyway.

EDIT: yet again, typos.

 

Really???

http://www.beeradvocate.com/beer/profile/199/48505/?ba=keithmurray

 

What's to prevent some large brewer or private equity firm from buying a majority of the publicly offered stock?

 

What's Ballast Point's potential to grow?

 

Yep. When I see stuff like Sculpin or a regular ABV stout (Commodore) priced at $15.99, i gotta roll my eyes before I walk past it in the beer aisle.

 

Ballast Point makes excellent beer, but they're so damn expensive. If they could lower the price of Sculpin by even a few dollars, I'd be really happy.

 

Nothing. Major companies own shares in each other all the time. Wouldn't be even a little surprised to see InBev buy at least a few shares, just for the peek behind the curtain, if nothing else.

 

I think Victory at Sea is worth every penny. Haven't been wowed by many others but it's interesting to see this happening.

 

Probably only issuing shares for a portion of the total equity. The owners will hold enough shares to ensure they retain control of the company.

 

If anything, this allows every other craft brewer to roughly estimate its own market value and plan their own eventual cash out/liquidity strategy. But every time I see a brewer get bought out or structure a major financial transaction like this, I kind of laugh at the current Kickstarter model of "financing" new breweries. "Sure, I'll take $1,000 worth of coasters and line cutting privileges at your next release. It's not like you guys are just in it for the money, it's all about the beer, right?"

 

"publicly offered"... I have no doubt they will retain a controlling share.

 

I think you missed my point. You rated VAS a 4.74, yet claim their beer is only "ok to decent".

 

@charlzm

There are at least two models that successful breweries have used in the past for maintaining control with an IPO.

Sam Adams has two categories of stock, voting and non-voting. Koch retained owership of all shares of voting stock and only non-voting stock was offered on the market. At one time these non-voting shares were valued at $17 or below. Currently they are worth over $200.

Duvel-Moortgat offered a percentage ownership of shares small enough that family ownership remained in control and they acquired enough money to engage in a larger scale business plan that included acquisition of at least one other Belgian brewery that was about to go out of business. They did well enough with their growth plans that they later staged a buy back of outstanding shares at a very nice profit for the share holders, there by increasing family ownership and control. This was done before they began acting on their long range plan to invest more heavily in US based breweries to have greater access to the US market. By that time they already owned Ommegang and proceeded to acquire/partner with Boulevad and Firestone-Walker.

 

Good to strong would be my guess. That is most likely the point behind the IPO. Acquistion of Capital for growth purposes, which would seem to include, consolidation of present facilities, expansion of capacity and possibly acquistion of other small breweries in a different geographical area thereby creating potential for increased distribution of both at not a lot of extra cost.