Dogfish Head Sells 15 Percent Stake to LNK Partners

Discussion in 'Beer News' started by Todd, Sep 29, 2015.

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  1. Todd

    Todd Founder (13,254) Aug 23, 1996 Finland
    Staff Super Mod Pooh-Bah Society Trader

    Read more: http://www.brewbound.com/news/dogfish-head-sells-15-percent-stake-to-lnk-partners

    Reply from @SamCalagione: http://www.beeradvocate.com/communi...nt-stake-to-lnk-partners.339440/#post-4109450
     
  2. gmoneyproductions

    gmoneyproductions Initiate (0) Aug 12, 2015 Colorado

    seems to be the trend here
    hope these private equity f@cks dont mess with the good beer....
    i would assume we will see many more of these deals in the next few years especially given that we just hit the 4000 brewery mark
    if Goldman Sachs gets their slimy vampire squid tentacles on any of my favorite brewers i am gonna be pissed.....
     
    Brolo75 and rronin like this.
  3. Thirstygoat

    Thirstygoat Initiate (0) Nov 22, 2012 Illinois
    Trader

    Get some money off the table and keep 85%; makes sense to me. If this is what it takes to have 90 Minute at the Hy-Vee
    six blocks from my house, a recent development, instead of three hours away I can deal.
     
  4. jlsims04

    jlsims04 Initiate (0) Jul 14, 2013 Illinois

    Good for Sam. Glad to see continued success.
     
    EchoesZ, RobH, Dan_K and 1 other person like this.
  5. Oceanbear1

    Oceanbear1 Initiate (0) Aug 8, 2013 Colorado

    It's only 15%. I'm cool with it, I hoe this means they can expand some more, like into Missouri!
     
    JLaw55, creepinjeeper and EchoesZ like this.
  6. BMBCLT

    BMBCLT Grand Pooh-Bah (3,403) May 9, 2014 South Carolina
    Pooh-Bah Society

    Uh huh! And he said that he'll never sell.
     
    Ranbot and SammyJaxxxx like this.
  7. mwa423

    mwa423 Initiate (0) Nov 7, 2007 Ohio

    What I find truly interesting with this deal is for private equity, what's the point here? They put down what I'm sure is a pretty fat stack of cash up front, have basically no input on the operation of the business and they're just hoping for healthy dividends which they don't control? I'm guessing the stake is relatively illiquid (that the other 85% owners have first right of refusal to sell) and require approval from the board to sell. So...why is this a good investment?
     
    5thOhio likes this.
  8. Himself

    Himself Initiate (0) May 20, 2014 Massachusetts

    1 vote on the board does not control the board in my opinion.
     
  9. bluehende

    bluehende Initiate (0) Dec 10, 2010 Delaware

    The most interesting thing in the whole article is that it is to help with the oncoming competition with well capitalized companies.
     
    fureousangel and jstngjohnson like this.
  10. jlsims04

    jlsims04 Initiate (0) Jul 14, 2013 Illinois

    Its a very successful company. Im sure that the investment came with a share of the profits. Look at it like a silent partner. They provide capital for a constant return on their investment (as long as DFH continues to be profitable)
     
  11. mwa423

    mwa423 Initiate (0) Nov 7, 2007 Ohio

    Sure, it's currently a successful company, but it's easy for a successful company which is going to continue to expand to have negligible/no profits. Alternatively, it wouldn't be hard for the company to decide (this probably isn't the type of people Dogfish are, but it's an example) that Sam gets a bonus at the end of the year equal to 100% of net profits, no shareholder distribution. Obviously, we don't know the numbers here or the intricacies of the deal, but it just seems like this is a strange private equity play.
     
  12. jstngjohnson

    jstngjohnson Initiate (0) Dec 30, 2014 Virginia

    seems like the PE firm thinks of this as a solid ten year investment. Very little say on the board with a buy back plan already in place? Sounds like they like Sam's plan
     
    jongullotti likes this.
  13. jlsims04

    jlsims04 Initiate (0) Jul 14, 2013 Illinois

    Also a very real possibility. Its hard to judge the investment with no details.
     
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  14. gmoneyproductions

    gmoneyproductions Initiate (0) Aug 12, 2015 Colorado

    i think its smart for the private equity firms in that this is a low risk albeit illiquid investment
    its a very successful brewery in a growing industry that has defensive characteristics and not at all tied to the sh!tshow of a stock market
     
    Ranbot and jlsims04 like this.
  15. Billolick

    Billolick Grand Pooh-Bah (5,405) Dec 20, 2003 New York
    Pooh-Bah Society

    PE is not evil...the goal is to make more money...both for DFH and for the investors...this is how capitalism works....business have been using private investors and banks to help them make more $$$ for a long time....haters need to smell the coffee and grow up a wee bit about the realities of business and business competition....also Sam C is no dummy
     
  16. Joshjv

    Joshjv Initiate (0) Nov 12, 2013 Michigan

    Either A.) They do. Likely pretty soon after.
    Or B.) They don't. But they didn't before either.

    I believe that the percentage that follows along with what they say is pretty small..
     
  17. onespartan

    onespartan Initiate (0) Nov 1, 2008 Michigan

    My guess is that the PE firm believes there will be some form of public offering in the future to cash out. Maybe they know more than the rest of us. Otherwise, as others have mentioned, a minority, illiquid stake in a private company seems odd and not congruent with the typical PE investment. For the most part, they are not 'buy and hold' investors happy with some annual profit-sharing. Just my two cents.

    Sounds like a good deal for Sam though and a nice way to take some money off the table while retaining control. Much in the same way that Founders did.
     
    the_trystero and mwa423 like this.
  18. Scott17Taylor

    Scott17Taylor Initiate (0) Oct 28, 2013 Iowa
    Trader

    Awesome, hopefully they can expand into Iowa.
     
    NickTheGreat likes this.
  19. BeerGreg

    BeerGreg Initiate (0) May 17, 2013 Illinois

    I would agree with you. I rarely bought DFH before, so this news has no bearing on me. At the same time, I love Lagunitas, and will continue to purchase their beer, regardless of the "merger" (whatever it is) with Heineken.
     
    Pisthetaerus likes this.
  20. conoraugustine

    conoraugustine Initiate (0) Feb 17, 2015 North Carolina

    I'm more pissed off that this is becoming a trend rather than DFH's decision in general. But DFH is already huge so I don't see how this is necessary
     
    Brolo75 likes this.
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