BrewDog Files Reg A+ with SEC to Raise Capital for US Expansion

BrewDog, and its Equity for Punks campaign, is crossing the Atlantic and they are leveraging Regulation A+ to pay the way. Equity for Punks USA is accepting emails now for anyone interested in receiving updates on the forthcoming equity crowdfunding offer. The investment opportunity is expected to go live this coming May. BrewDog has stated its intent to sell up to 20% of the equity in BrewDog USA, the balance of the ownership will be on BrewDog plc’s balance sheet.

 

So here it is. Every single BrewDog recipe. Ever. For free! #DIYDoghttps://t.co/74k7Qjdh0T pic.twitter.com/1lm1PKdGsb

— BrewDog (@brewdog) February 25, 2016

As previously reported, BrewDog is establishing a beachhead in Columbus, Ohio. The  brewery is said to be 8X the size of its operation in Scotland. BrewDog will not only expand its reach to Yankees but also plans to use the new capacity to export into other countries. The initial cost of the Ohio brewery has been pegged at $25 million. The site will eventually have capacity to produce 1 million barrels of crafted BrewDog beer annually. The US craft beer market continues to experience impressive growth –  at about 17.6% annually as consumers move away from mass-produced brands to higher quality (and far better tasting) beer.

BrewDog recently announced the hiring of Tim Hawn to be Brewmaster of the US operations. Hawn was previously with very popular craft brewer Dogfish Head. Hawn will be joining other US-based team members Jason Davis as VP of Sales, Katie Murphy as “Expansion Matriarch” and Keith Bennet as Project Manager.  Katie expects BrewDog’s Ohio facility to “put Columbus on the map for being the craft beer capital of the USA.”

According to the filing with the SEC, BrewDog may raise up to $50 million at a price of $47 / share.  Kendall Almerico, a well-known attorney in the crowdfunding space, filed the document on behalf of the Scottish operation. BrewDog had publicly stated its intent to ship the EquityPunks crowdfunding operation to the US but speculation appeared to be leaning towards using Reg CF. Created under Title III of the JOBS Act, Reg CF allows anyone to invest in smaller companies but the exemption has been criticized as being too prescriptive with a hobbling cap of just $1 million.  Under Tier II of Regulation A+, anyone may invest (not just accredited investors) but the issuing company may raise up to $5o million.  The larger funding allowed under Reg A+ has propelled the new exemption into higher profile offers such as Elio Motors or Virtuix.  While BrewDog has not indicated its intent to use a crowdfunding portal and/or Broker-Dealer – Almerico is a partner in his own equity crowdfunding platform BankRoll.

BrewDog has been on a perpetual mission to raise growth capital via its customers and not by institutional funds. The company has raised tens of millions of pounds in the UK that has fueled impressive growth. Founded in the back of a van in 2007 by James Watt and Martin Dickie (and a dog of course), BrewDog generated approximately £140,000 in revenue its first year of operation. In 2014, BrewDog topped £29 million in sales.

BrewDog is now the largest independent brewery in Scotland producing over 134,000 hectolitres. Today BrewDog ships to over 50 different countries and has 28 craft beer bars around the globe.

While details of the US share offer under Reg A+ are not yet available, in the UK BrewDog has married ownership with perks such as discounts on beer.

BrewDog has also been noted for its guerilla marketing tactics to promote share ownership (alongside its beer). In the spring of 2015, BrewDog leased a helicopter to drop stuffed “Fat Cats” dressed in waistcoats, top hats and monocles. These cats bombed London holding the BrewDog investment prospectus. BrewDog called the stunt “anti-propoganda propoganda”. At that time, BrewDog had raised £5 million as  part of a larger effort to raise £25 million from investors.

Artisanal beer has been a popular category for equity crowdfunding in the UK. Affinity marketing has helped smaller breweries raise capital from fans to boost expansion.  Expect to hear more from BrewDog soon on their impending equity crowdfunding round for Yanks.

 

Update: We have just heard from Kendall Almerico that BrewDog is expected to offer shares via BankRoll once the filing is approved by the SEC. Broker-Dealer will be Source Capital Group.