Craft Brewing Investment Trends

Where Will New Owner Take Pabst?

Although there were many high profile transactions involving beer companies in 2014, none generated as much attention as the acquisition of Pabst Brewing Company by Russian-born American Eugene Kashper. And none involved as much money or controversy.

The purchase price was said to be $700 to $750 million by a variety of sources and included $593 in debt financing, according to Forbes.com. It all bought a company that C. Dean Metropoulos originally purchased for a mere $250 million in 2010.

Kashper, who partnered with investment firm TSG Consumer Partners to make the purchase, is the founder of Oasis Beverages, which originally was stated to be the buyer in the media release announcing the deal in September. Based in Cyprus, Oasis launched in 2008 with a brewery in Moscow and later partnered to purchase brewing operations in the Ukraine and Kazakhstan.

Once headlines decried the prospect of the iconic Pabst Blue Ribbon brand being purchased by a Russian company, the deal was quickly re-characterized as a purchase by Kashper and TSG.

Under a board of directors including Eric Ottaway, the CEO of Brooklyn Brewery, it is a matter of speculation how the purchase will affect the beer business in the U.S. and internationally – or whether Kashper and partners paid too much.

“We intend to invest meaningfully in the organization, to continue strong marketing support for PBC's unique brands, and to drive new product innovations and renovations, such as the recent launch of Ballantine IPA," said Kashper in a statement.

The new owner has stayed out of the media eye since the firestorm over the initial announcement. At Oasis, he enjoyed a successful stint as chairman before resigning in favor of the Pabst deal. The Oasis conglomerate is a licensed contract brewer for well known German, British and Danish brands as well as the importer to Russia of brands such as Duvel, Chimay and Budvar. The Moscow brewery, meanwhile, produces throwback beer from the Soviet era and a “pre-revolution” brand, which captured a solid following in the Russian capital. The operations in Ukraine and Kazakhstan also focused on traditional brands.

Having started his career at the Stroh Brewery Company two decades ago, Kashper, who emigrated to the U.S. with his parents at the age of six, has become an expert in historic brands, licensed brewing and international business, He now owns the rights to a portfolio of historic U.S. brands such as Ballantine, Old Style, Schlitz and others that are contract brewed. The list includes Pabst Blue Ribbon, which is brewed by MillerCoors in Milwaukee.

Pabst sales have leveled off recently from previous strong growth but Ballantine IPA, an historic brew re-launched by the previous Pabst owners, is gaining traction.Whichever direction he chooses to take Pabst, the Columbia University-educated Kashper will be a man to watch. 

Photos Courtesy of their respective breweries