Mighty Craft offloads "non-core" Sparkke

Illustration of what the Mismatch brewpub could look like

Mighty Craft has exited its shareholding in Sparkke Group Holdings Pty, nine months after suggesting it was looking to offload “non-core assets”.

As part of the transaction, Mismatch Brewing Co., which is 100 per cent Mighty Craft owned following the acquisition of the Adelaide Hills Group last year, will take over The Whitmore brewpub.

Mismatch is entering into a new seven-year lease on the property, and Mismatch products will now be brewed on-site, to further strengthen the brand in Adelaide.

In return, Mighty Craft has agreed to “forgive any liability owed to it under the convertible notes in Sparkke” which have a total face value of $1.5 million, it told the ASX this afternoon.

Mighty Craft will also cancel its shareholding in Sparkke.

The ASX-listed accelerator acquired interest in Sparkke in 2019, before upping its stake in 2021. Sparkke itself was founded in 2018 and undertook a $1.8 million renovation in the 180-year-old Whitmore Hotel.

In February 2022, Mighty Craft, formerly Founders First, announced to the ASX that it was planning on divesting “non-core assets”, to focus on major areas of the business such as its whisky acceleration program and Better Beer.

Although it did not mention explicitly which assets they were, it has since put its Mighty Craft venues on the market, and its last statements suggested that Foghorn was also considered under that umbrella.

Mark Haysman, chief executive and managing director of Mighty Craft, said in a statement to the ASX this afternoon that it was a “great outcome for all parties”.

“Mighty Craft has been working on divesting non‐core assets and simplifying our business, which will in turn enable us to focus on our priority brands and further accelerate and grow those priority brands.

“This transaction is a demonstration of the team executing those plans and is a good result for the Sparkke team, who can now focus on building their spirits business.

“Importantly for Mighty Craft and Mismatch, we now have the opportunity to takeover an award‐winning brewpub.

“We look forward to Adelaide’s favourite craft brand settling into The Whitmore”.

Rose Kentish, director and co-founder of Sparkke, said that they were proud of their achievements.

“We’re proud that we developed and launched an incredibly successful, award‐winning venue that gained local acclaim and national attention.

“The harsh impacts of 2020 continue to be felt in Adelaide’s current trading environment. In keeping with our commitment to shareholder value, the community in which we operate, and our pub staff, the decision to put our beautiful venue into the hands of a significantly better resourced operator is the right one.

“We’ve worked well and collaboratively with Mighty Craft and we’re sincerely grateful to them for their contribution to the negotiated outcomes.

“We warmly welcome our colleagues from Mismatch into their new home and wish them every success. We look forward to focussing all of our energies behind the next phase of our company’s growth.”

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