Mighty Craft has announced plans to sell Mismatch Brewing and 78 Degrees Distillery to a group led by the former boss of CUB, Peter Filipovic.
The ASX-listed "craft drinks accelerator" said the deal was worth $7.2 million dollars and included all assets associated with the brewery and distillery, along with branding, intellectual property, licences and the leases for Mismatch's venues. The sale is planned to be completed no later than May 31 and is reliant on the transfer of all liquor licenses to the new owners and "reasonable" efforts being made by both parties to retain key staff.
Mismatch have two venues in South Australia: their main brewhouse and taproom is located inside LOT.100 in the Adelaide Hills (which is also home to 78 Degrees); and a brewpub in Adelaide that was formerly home to Sparkke, which was also once part of the Mighty Craft stable but has ceased to operate.
In an announcement to the ASX, Mighty Craft said the brewery and distillery's new owners were a consortium of experienced publicans operating as Mismatch Brewing Publicans, Mismatch Brewhouse Publicans and 78 Degrees Distilling Publicans. Documents filed with ASIC show Peter Filipovic to be the director of all three businesses.
Peter, who is better known as Flip in the beer industry, was CEO of CUB from 2019 until 2022 after spending decades working at one of the country's two largest brewing companies. This purchase comes just six months after he led a group of publicans, called the Jetty Road Publicans, to buy Jetty Road from Mighty Craft, and subsequently Hills Cider, with the latter also originally part of the Adelaide Hills Group which included Mismatch and 78 Degrees. The Crafty Pint has reached out to Peter about this latest acquisition and plans for all the businesses going forward but he wasn't immediately available for comment.
The sale of Mismatch and 78 Degrees represents a significant decline in the value of Mighty Craft's portfolio; the ASX-listed business bought the entire Adelaide Hills Group in a deal worth $47 million less than three years ago. Mighty Craft said about half of this sale would go towards paying its outstanding debt with the rest going towards keeping the business running; Mighty Craft's main focus in recent times has been directed towards divestment and reducing its operating costs.
Mighty Craft's website describes the business as a craft drinks accelerator that enables brands to scale their production, distribution and sales through access to industry leadership, expertise and access to capital. However, today the business' primary asset appears to be Better Beer, with Mighty Craft's most recent business update to the stock exchange stating that 90 percent of its consolidated revenue for the second half of 2023 came from the low carb beer brand.
Last year, sales of Better Beer were close to 12 million litres, which represents rapid growth for a brand that only launched in 2021, when it was founded by Mighty Crafty, comedy group The Inspired Unemployed and Nick Cogger from Torquay Beverage Company.
In February this year, Slipstream Brewing's founders, Deale and Elisa Stanley-Hunt, announced they'd bought back shares originally sold to Mighty Craft in 2019.
The Crafty Pint has reached out to Mighty Craft for comment on the sale but had not heard back at time of publication.
ASX Announcement: Mighty Craft sells Mismatch and 78 Degrees
Mighty Craft Limited (ASX:MCL) (“Mighty Craft”, “MCL” or the “Company”) is pleased to announce it has entered into an agreement to sell the assets associated with each of Mismatch Brewing Company Pty Ltd (“Mismatch”) and The Hills Distillery Pty Ltd (“78 Degrees”) to a third party buyer led by a consortium of experienced publicans in the Australian hospitality industry (“Buyer”).
As part of the transaction, the assets associated with Mismatch and 78 Degrees, including the brands and all intellectual property, trading names, contracting arrangements, inventory, plant and equipment, and licences will be sold to the Buyer for cash consideration totalling not less than $7.2 million (plus GST, if applicable). The sale is conditional upon the transfer of all liquor licences, and the parties using reasonable endeavours to recommend certain personnel associated with the businesses accepting offers of employment made by the Buyer. The sale also includes the assignment of the leases for the Mismatch Brewhouse venue and the Mismatch and 78 Degrees production facility in South Australia.
It is intended that approximately half of the proceeds of the sale will be paid to MCL’s senior lenders as partial repayment of its outstanding debt facilities and the other half will fund the ongoing operations of the business. Whilst the timing of completion of the sale is uncertain, the parties are currently targeting a settlement on or prior to 31 May 2024.
Will Ziebell is a history graduate who knows more about The Wire than he does about beer. He was awarded the AIBA Best Media trophy for 2018; HBO have told him to please send his fan mail elsewhere. He can be found on Instagram, Twitter and TikTok.
The beer(s) or moment(s) that turned you on to good beer:
Spending time living in the UK (and backpacking across Europe) when I was 21 certainly gave me a better understanding of the beer and different styles of the world. But I'd say it was a holiday to the High Country a little while later when lunch and a tasting paddle at Bridge Road Brewers created an obsession with Australian breweries and locally made beer.
You've got three beers to turn someone else on to good beer; what are they and why?
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Boatrocker's Miss Pinky: It's a raspberry-packed Berliner Weisse that neither looks or tastes the way many people conceive of beer.
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Bad Shepherd Hazelnut Brown: A luscious mix of chocolate and hazelnut that can appeal to the sweet tooth within us all.
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Stone & Wood Pacific Ale: As the father of my oldest friend once said to me: "It's the perfect refreshing pint that smells like they've loaded it with the God's herb."
The last beer you enjoyed:
Garage Project's DFA while sitting at the bar at Miss Moses as the sounds of The Rolling Stone drifting in the background.
Three things that represent you:
- Bruce Springsteen
- Ken Burns
- The State Library of Victoria
