Keystone Brewing Group, the brewing arm of private investment group Breal Capital, showed an interest in acquiring ailing craft brewer Fourpure in a joint deal with brand owner In Good Company (IGCO), The Grocer can reveal.
Keystone, which owns beer brands including Black Sheep, Purity Brewing, Brew By Numbers and Brick Brewing, “engaged in substantial discussions with IGCO, exploring the possibility of forming a newco with a split shareholder structure”, documents pertaining to Fourpure’s administration showed.
However, “despite several weeks of negotiations”, Keystone subsequently withdrew its interest in the opportunity, joint administrators David Hudson and Philip Reynolds of FRP said.
Keystone has developed a reputation for circling distressed brewing businesses over the last 18 months. The Breal-backed business held an interest in but ultimately failed to acquire North Brewing earlier this year.
Its purchases of Black Sheep, Purity Brewing, Brick Brewery and Brew By Numbers, however, all came with the businesses either heavily insolvent or on the verge of collapse.
Earlier this year, Keystone CEO Mark Williams told The Grocer he would look to acquire more breweries to grow annual revenues from its beer operations almost fourfold to £100m by 2028.
Asked about Keystone’s interest in Fourpure, Williams said: “Being an acquisitive company, Keystone has an interest in any brewery business for sale. Given Keystone’s desire to re-enter the London area, Fourpure was of interest at the time.”
What has happened to Fourpure?
After Keystone withdrew its interest in Fourpure, IGCO subsequently paid £100,000 to acquire the brewery’s goodwill and intellectual property rights. The deal was announced alongside news of Fourpure’s administration last month.
The offer was executed at the recommendation of FRP and restructuring advisory company Hilco. It is a credit bid agreement funded by IGCO’s majority shareholder Glas Trust Corporation (GLAS).
GLAS, which describes itself as a “provider of debt administration and loan agency services”, is one of Fourpure’s secured creditors. Following the deal, it now holds a fixed charge over the assets of Fourpure totalling £2.9m.
Brewing equipment from Fourpure’s now shuttered Bermondsey site is to be marketed and sold to pay GLAS. The company is still expected to see a shortfall in the administration, however.
The company’s other secured creditor, Ultimate Finance, has recovered monies owed to it totalling £113,555.
Fourpure debts revealed
HMRC, meanwhile, is owed almost £1.9m by Fourpure, including the £1.6m outlined by the business upon entering a company voluntary agreement in March of this year.
These debts mounted over the summer, with Fourpure failing to make payments owed to HMRC in four successive months between May and August. It was “likely to run out of cash within two to three weeks” prior to entering administration, the administrators wrote.
Despite this, there was expected to be sufficient funds to enable a distribution to be made to HMRC, the administrators said, adding they would provide further detail in their next report.
Unsecured creditors – owed a total of £3.7m – were not expected to see a return due to “limited asset realisations and the level of expected secondary preferential claims”, they added.
Fourpure’s stock, meanwhile, was sold to Magic Rock prior to the company being placed into administration. This outcome, the administrators said, “achieved a greater realisation than if it was to be completed after the company was placed into administration”.
Magic Rock also acquired Fourpure’s “operational assets” including moveable equipment, vehicles and customer database for £7,102.
IGCO has been approached for comment.
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