New Belgium: No sale pending

Coloradoan staff | Coloradoan

Show Caption Hide Caption New Belgium exploring a sale? Reuters reports the Fort Collins landmark could be valued at $1 billion.

One of Fort Collins’ most iconic companies is reportedly exploring a sale.

New Belgium Brewing Co. could be valued at more than $1 billion, according to a Reuters report report citing unnamed sources that claim the brewery is working with a New York-based advisory group on a potential sale.

The brewery, founded here in 1991, employs more than 650 people nationwide and more than 400 in Fort Collins. It is known throughout the country for its Fat Tire Amber Ale. It is the fourth-largest craft brewery in the United States.

In a statement sent Friday to media, New Belgium co-founder and board chairwoman Kim Jordan said: "New Belgium Brewing’s Board of Directors has an obligation to have ongoing dialogue with the capital markets with the goal of making sure that we remain strong as leaders in the craft brewing industry. There is no deal pending at this time."

New Belgium, which is widely seen as an influence on aspects of Fort Collins culture ranging from brewing to bikes to sustainability, did not expand on the release Friday.

In October, Jordan stepped down from her role as CEO. Christine Perich became chief operations officer and brewery president for the company that is close to completing construction of its East Coast brewery in Asheville, North Carolina.

"Kim has established a foundation that has led to 24 years of success. We won't be changing who we are," Perich said at the time. "We look forward to becoming a national brand and helping to shape the craft beer scene for years to come."

In 2014, New Belgium produced nearly 950,000 barrels of beer exclusively at its Fort Collins facility. New Belgium transitioned to full employee ownership in 2013.

It’s likely the hundreds of employee-owners of New Belgium would have to vote on any sale.

A company in transition

Aside from its change in leadership, 2015 has marked other significant changes for the growing brewer.

The first batch of beer is churning through New Belgium's 133,000-square-foot brewery in Asheville, where the company also built a 141,000-square-foot distribution center in nearby Enka. The distribution center will support East Coast distribution of New Belgium beers.

In an October interview with Shanken News Daily, a wine, spirits and beer trade publication, Perich said the brewery would experience its first down year in 2015, having pulled back on its production.

“Last year, we grew substantially and it was semi-painful for us," she said. "We’re at maximum capacity in Fort Collins and we’re trying to get Asheville up and running so we’ve been very thoughtful about how we manage volume this year.

“We’re using a lot of our resources in Fort Collins to get Asheville going, so we couldn’t have the pedal down as hard as we did last year. Beyond 2016, we’ll have the capacity in Asheville and the ability to ramp up that site.”

The company is also expanding its Fort Collins headquarters, with a $7 million taproom, beer garden and office space expansion set to be completed in June. Among the additions is an on-site health-care center for employees and their families.

The beer industry in Larimer County contributes 2,632 direct jobs and more than $160 million in annual wages. It is valued at $1.2 billion in direct output, as of the most recent economic impact study, published this summer by the Beer Institute based in Washington. New Belgium is the second-largest brewer in Fort Collins, behind only Anheuser-Busch.

Each year, New Belgium contributes hundreds of thousands of dollars to local and national nonprofits, through its popular Tour de Fat bicycle series and other efforts. It gave CSU's Fermentation Science and Technology program $1 million in April. It consistently donates to nonprofits working toward watershed conservation and restoration, youth environmental education and bike advocacy.

Spokeswomen for Odell Brewing Co. and Fort Collins Brewery, the other two points of Fort Collins' so-called craft brewery triangle northeast of Old Town, declined to comment on the potential sale of New Belgium. Calls to Fort Collins city and business leaders seeking comment for this story were not returned Friday.

A changing industry

Craft brewer Full Sail Brewing in Oregon is 58 percent employee-owned. In May, employees voted to sell it to a private equity firm. At the time, The New School, an industry publication in the Northwest, reported employees were — based on their time at the company — likely to earn four to five figures in the buyout and retain their jobs.

Mergers and acquisitions are on the rise among breweries nationwide, said Bart Watson, chief economist with the Brewers Association, a national trade group that promotes craft brewing and follows industry trends. The Brewers Association doesn't track acquisitions specifically because the deals are mercurial and often private, but Watson attributes an increase in sales to the aging of owners and founders as well as industry growth.

As of late November, there were 4,144 breweries in the United States, and an average of two new breweries open every day, Watson said. The market tops a record set back in 1873, when there were 4,131 breweries in the U.S.

“It’s a growth moment for the industry," Watson said. "A lot of people are looking for capital to continue that growth.”

Still, Watson estimated that less than 1 percent of breweries were involved in a merger or acquisition in 2015. And he stressed that rumors of a brewery sale are often unfounded.

“A lot of breweries are doing their due diligence” by investigating a sale, but that doesn't necessarily mean they'll go through with it, he said.

Similar speculation

Friday isn’t the first time in recent years that Reuters cited unnamed sources speculating on the potential sale of a high-profile Fort Collins company, either.

An August 2014 Reuters report said that Otter Products, maker of OtterBox smartphone and mobile device cases, was exploring a possible sale that could value the company at more than $2.5 billion. Curt Richardson founded the company here in 1998.

OtterBox at the time declined comment on a Reuters report citing “sources familiar with the matter” who said the company had hired Goldman Sachs Group, Inc., to manage the sale process.

Sixteen months later, OtterBox remains locally owned, with Richardson serving as chairman and Peter Lindgren as president and CEO.

New Belgium facts

Founded: 1991

Founders: Jeff Lebesch and Kim Jordan

Employees: 650 nationwide

Barrels per year: 945,000 in 2014

Size: Fourth-largest craft brewery and eighth-largest brewery overall in U.S.

Distribution: 38 states and District of Columbia and British Columbia, Canada

Expansion: Asheville, N.C. expected opening early 2016

(From the archives: Quick questions with New Belgium CEO Christine Perich. More content below.)

From the archives: Quick questions with former New Belgium CEO Quick questions with New Belgium CEO Christine Perich.

(From the archives: Former New Belgium Brewing CEO sits down with the Coloradoan about the company's future.)