LA CROSSE, Wis.--(BUSINESS WIRE)--City Brewing Company, LLC (“City” or the “Company”), the leading co-manufacturer of high-growth beverages in the U.S., today announced a series of business updates designed to accelerate the Company’s growth, usher in a new generation of City management, and provide its customer partners with even more comprehensive long-term supply solutions. City is also announcing an equity investment after which a consortium of investors including Charlesbank Capital Partners (“Charlesbank”), Oaktree Capital Management, LLC (“Oaktree”), Blue Ribbon Partners, LLC (“Blue Ribbon”), and City management will own 100% of City Brewing. The transaction is expected to close in April 2021.
Leadership Changes
Upon closing of the transaction, Chairman and CEO George Parke III will be retiring. Ross Sannes, City’s COO, who has been with the Company since 2012, will assume the role of Chief Executive Officer. Ryan (Spike) Nelson, a City employee since 2001, will be promoted to Executive Vice President, and Dave Poremba, who joined the Company in 2020, will continue to serve as Chief Financial Officer.
The Company has also named Hans Savonije, a beer and beverage industry veteran, Chairman of the City Brewing Board. Hans brings over 30 years of international experience and most recently served as CEO of Royal Unibrew, a publicly traded brewer based in Denmark.
Investment Plan and Launch of Irwindale Brewery
City also announced a $630 million investment program to accelerate the Company’s growth. The investment plan will fund the Company’s capacity expansion program as City seeks to enhance its innovation capabilities and meet growing demand from key customers. The Company is committed to offering best-in-class supply chain services, and to continually upgrading its state-of-the-art processing and packaging technology.
As part of this investment program, City has agreed to acquire the Irwindale brewery operations from Pabst Brewing Company. City plans to re-open the iconic Irwindale brewery formerly owned and operated by Miller Coors in Southern California. Once operational, the newly named “Irwindale Brew Yard” will be the largest full-service, low-alcohol beverage contract production facility in the western United States. The plant will have initial capacity of approximately 55 million 24 x 12-oz cases per year and is expected to grow to 110 million cases per year by 2024. The facility is expected to begin production in the third quarter of this year and to hire over 150 employees within the next 12 months.
City will add a wide range of processing and packaging capabilities, enabling the Irwindale Brewery to produce hard seltzers, traditional FMBs (flavored malt beverages), mainstream and craft beer, premium non-alcoholic drinks and spirit-based ready-to-drink beverages in a broad variety of primary and secondary packages. The plant will also feature automated variety pack capability.
Executive Quotes
Ross Sannes, CEO of City, said, “I am excited to assume the role of CEO and continue working alongside the exceptional team at City. Strategically located on the West Coast, Irwindale Brew Yard perfectly rounds out our national footprint. This investment will allow us to enhance our brewing, processing and production capabilities, positioning us for future growth while enabling us to better serve our valued customers. We are an essential component of our customers’ supply chains and we do not take that for granted. Thanks to George’s leadership and unrelenting commitment to the City business over the last 20 years, as well as the hard work from the talented City team, I am confident that City is poised to grow along with our customer partners and capitalize on the current trends in the alcoholic beverage marketplace.”
Josh Beer, Managing Director at Charlesbank commented, “Over our history, we have significant experience investing in contract manufacturing and food & beverage businesses. We are excited to leverage that experience to help Ross and the entire City team continue to build on City’s track record of success. We fully support the team’s growth program, which represents a strong long-term commitment to City’s customers and the markets they serve.”
Hans Savonije, Chairman of City, stated, “I am honored to be joining City at such an exciting time in the Company’s history and to support Ross and the leadership team through the next phase of City’s growth. George and the City team have done a remarkable job navigating the powerful secular trends in the U.S. beverage landscape.”
Frank Doseger, General Manager at Irwindale Brew Yard, said, “City is an ideal partner for the relaunch of Irwindale Brew Yard. City brings long-standing customer relationships and partnership agreements that ensure we will have significant customer demand right from the start. This brewery has been an important part of the Irwindale community for decades. We are proud that the innovations we’re investing in will continue Irwindale’s brewing legacy and ensure the brewery’s partnership with the City of Irwindale for years to come.”
About City Brewing
City Brewing is the largest full-service alcoholic beverage contract manufacturer in the United States providing co-packing and supply chain services to blue chip customers across their Hard Seltzer, Traditional FMB, Beer, Spirit-based RTD, and premium non-alcoholic beverage brands. City currently operates out of three facilities located in La Crosse, WI, Memphis, TN and Latrobe, PA with over 1800 employees.
About Charlesbank Capital Partners
Based in Boston and New York, Charlesbank Capital Partners is a middle-market private investment firm managing more than $8 billion of capital. Charlesbank focuses on management-led buyouts and growth capital financings, and also engages in opportunistic credit and technology investments. The firm seeks to build companies with sustainable competitive advantage and excellent prospects for growth. The firm has significant experience partnering with leading contract manufacturing businesses across a variety of industries. Examples of Charlesbank co-manufacturing investments include Hearthside Food Solutions, Peacock Foods, Tecomet, and OnCore Manufacturing Services. For more information, please visit www.charlesbank.com.
About Blue Ribbon Partners
Blue Ribbon Partners, led by American beverage entrepreneur Eugene Kashper, is a new investment platform focused on the beer and beverage industry in the US. Blue Ribbon owns Pabst Brewing Company and holds a significant ownership interest in City Brewing.
About Oaktree
Oaktree is a leader among global investment managers specializing in alternative investments, with $148 billion in assets under management as of December 31, 2020. The firm emphasizes an opportunistic, value-oriented and risk-controlled approach to investments in credit, private equity, real assets and listed equities. The firm has over 1,000 employees and offices in 19 cities worldwide. For additional information, please visit Oaktree’s website at http://www.oaktreecapital.com.