Tenth & Blake Beer Co., the craft brewery arm of MillerCoors LLC, plans to purchase a minority interest in Athens, Ga.-based Terrapin Beer Co.
Established in 2010, Tenth & Blake includes MillerCoors’ craft and import brands, like Blue Moon, Peroni Nastro Azzurro and Leinenkugel’s.
Terrapin, founded in 1997 by John Cochran and Brian Buckowski, started out as a small contract brewery, using other brewers’ equipment to make small batches.
In 2007, the partners opened their own brewery and took on an investor group. The company’s sales skyrocketed with the popularity of craft beers, with 40 percent revenue growth each year from 2007 to 2010, Cochran said.
When the investor group and the Terrapin owners disagreed about the future direction of the company, Cochran and Buckowski decided to buy out the investor group.
They secured a loan through Tenth & Blake to conduct the buyout, which went through in December 2010, and were in the process of paying it off. Recently, Terrapin asked Tenth & Blake if they would convert a portion of the loan to a minority stake in the company.
Tenth & Blake accepted, and the deal is expected to go through in the next two months, Cochran said. He did not disclose the amount of the loan or investment.
The minority interest is less than 25 percent, which allows Terrapin to maintain its independent craft brewer status with the Brewers Association.
“It was very important that we stayed an independent craft brewery,” Cochran said. “Nothing really changes for us. It’s not us selling to MillerCoors by any means, it’s just us going out and getting the capital we need to expand.”
The MillerCoors craft brewery division understood the founders’ goals for Terrapin and was a better investor fit, said Thomas Ryan, a Tenth and Blake spokesman.
While the loan was an unorthodox move for Tenth & Blake, it allowed Terrapin to follow a dream for the company that the previous investors did not share, said Tom Cardella, Tenth & Blake president, in a letter to employees last week.
“We loved their passion, and we saw a great opportunity to accelerate their dream by providing them with financial resources by becoming a minority investor,” Cardella said. As minority investors, we are committed to helping Terrapin reach its full potential, while carefully protecting those things that make it so special and unique. For Terrapin, our level of investment gives them the financial strength required to capitalize on some great opportunities, while preserving its ability to operate as an independent company and a member of the Brewers Association.”
Because of the investment by Tenth & Blake, Terrapin will be able to double its beer production next year, he said.
Terrapin beer is distributed in nine states in the southeast, and is not available in Wisconsin. It expects to produce 18,000 barrels of beer this year.
