Brewery sale prices perplex Coopers
Coopers Brewery has not seriously considered the possibility of buying a craft brewery because the price tags are too hard to justify, according to managing director Dr Tim Cooper.
Cooper confirmed to Brews News that the SA brewer has been approached in the past by small breweries wanting to sell.
“From our point of view we think the amounts of money that are being paid for them seem to be too much,” he said.
“If we look at our own volume and what it costs for us to grow our business and what our business is worth to us, the amounts of money that you’d be paying for an incremental bit of growth seems too much.
“It’s better that we keep on spending more money on advertising to try and promote the Coopers brand.”
He and chairman Glenn Cooper told TheShout in 2012 that they felt Lion had overpaid for Little Creatures.
That particular transaction valued Creatures at 23 times EBITDA. The sale prices for privately owned breweries that have subsequently changed hands are less certain, but multiples of ten to 18 times earnings are routinely quoted as the going rate in current market conditions.
“The big companies seem to pay a lot of money for these craft brewers, from what we hear,” Cooper said.
“We’ve only heard rumours on how much Asahi paid for Mountain Goat, but from what we understand it was quite a lot.
“I had the impression that Mountain Goat wanted at least 15 times earnings for their business and they might have got that.
“One or two of them have spoken to us. We get given the data sheets to look at to see whether we want to make an expression of interest. We’ve signed the confidentiality agreements for a couple but not gotten any further.
“We’re sort of interested to know how much one would have to pay to get one of these smaller companies but the impression we get is it’s more than we could realistically justify,” the managing director said.
But Cooper, who acknowledged the brewer has been losing tap points to independent brewers, said buying one was not completely out of the question.
“I wouldn’t rule it out, but on the other hand we’ve been spending money on other things which keep us fairly indebted,” he said.
“Having spent the $65 million on the maltings we’ll be focusing more on reducing debt as opposed to looking for other investments.”