USA: 143-year-old Cold Spring Brewing Co. sold to private equity firm

Minnesota-based Cold Spring Brewing Co., one of the oldest beverage manufacturing plants in the U.S., has been sold by the Lenore family to private equity firm Brynwood Partners VII for an undisclosed sum. Brynwood currently operates seven manufacturing facilities strategically located across the U.S. through its portfolio company Harvest Hill, which was formed three years ago and has in the meantime acquired a large portfolio of juice brands. Cold Spring will be operated as a standalone company but will benefit from the scale and national distribution and manufacturing foot print of Harvest Hill.

Founded in 1874 in Cold Spring, MN, is a leading independent beverage manufacturer with over $60 million in net sales and employs approximately 350 people. In 2000, when John Lenore, owner of a California distributorship, bought the brewery, “we were an old brewery known to make kind of crappy beer,” recalls Doug DeGeest, vice president and general manager of Cold Spring Brewing Company. But strategic decisions to shift away from alcoholic to non-alcoholic beverages and to build in 2011 a $14 million state-of-the-art brewhouse and taproom and branding it the Third Street Brewhouse, named after a street that runs through its property, made the turnaround successful. The company halted production of the 150-year-old pilsner brand Gluek and debuted three beers under the Third Street brand in June 2012.

The company produced in 2015 about 90,000 barrels (105,600 hl) of energy drinks, carbonated flavored waters and craft beers primarily for other companies' proprietary brands and retailers' private labels. Besides, Cold Spring also brews beer under its own brand, Third Street Brewhouse, for distribution locally in Minnesota and Wisconsin.

In April 2015, John Leonore deceased and management of the brewery and the distribution company John Lenore & Co passed over to his son Jamie Lenore.

In November 2016 the company announced that it will be expanding its shipping facility by 300,000 square feet and create 60 new jobs to cope with the ongoing business growth. If the expansion will come true after the sale to Brynwood Partners has now to be seen.

Brynwood Partners, founded in 1984 and based in Greenwich, CT, is an operationally-focused private equity firm that makes control investments in North American-based lower middle market companies in the consumer sector. The investment company currently manages more than $725 million of private equity capital for its limited partners, which include U.S. and international pension funds, fund-of-funds, endowments, high net worth family investment offices and financial institutions.

"We are pleased to announce the acquisition of Cold Spring," said Henk Hartong III, Chairman and CEO of Brynwood Partners. "The well-run facilities and exciting growth plans for the company represent a great investment opportunity for Brynwood Partners." Mr. Hartong continued, "While Cold Spring will be operated as a standalone company, we believe it will benefit greatly from the scale and national distribution and manufacturing foot print of Brynwood Partners' Harvest Hill Beverage Company investment. We look forward to working collaboratively with Cold Spring's management team to grow the business."

Harvest Hill Beverage Company, based in Stamford, CT, was formed by Brynwood VII in July 2014 to acquire the iconic Juicy Juice® brand from Nestlé USA, Inc. Juicy Juice® is the largest 100% juice brand in the U.S. focused on the kids segment. The company markets Juicy Juice® products in single-serve and multi-serve formats to the retail and foodservice channels.

In March 2015, Harvest Hill acquired American Beverage Corporation ("ABC") from Wessanen, a publicly-traded food and beverage company based in Holland. With the ABC acquisition, the company added the Little HUG® juice brand and Daily's Cocktails® brand. ABC's brands are distributed to a blue-chip customer base that includes leading grocery retailers, wholesalers, supercenters and foodservice distributors.

In October 2016, Harvest Hill acquired Faribault Foods' juice pouch manufacturing facility in Elk River, MN and other selected assets. Most recently, in December 2016, the company acquired the Nutrament® energy drink brand from Nestlé Health Care Nutrition.

BrynwoodVII acquired Sunny Delight Beverages Co. from a private equity fund in February 2016 and, in May 2017, merged the company into its portfolio company, Harvest Hill. The 54-year-old SunnyD® brand is a leading chilled juice drink in the U.S. In addition to the SunnyD® brand, Sunny Delight markets the Fruit2O®, Veryfine®, Big Burst® and Guzzler® beverage brands. The company's products are widely distributed through leading retailers in the U.S. and Canada.

Harvest Hill, which currently operates seven manufacturing facilities strategically located across the U.S., intends to continue to grow its branded, private label and co-manufacturing businesses both organically and through strategic add-on acquisitions.

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