Pabst Purchased

Deal puts dozens of American brands in Russian brewer's hands

Steve Holtz, Editor in Chief, CSP Daily News

Pabst Brewing Co. beer brands

NEW YORK -- Like so many other American beer brands, Pabst Brewing Co. is now in international hands.

Russian beer magnate Eugene Kashper’s Oasis Beverages, based in Cyprus and a major beer brewer and soft-drink maker in Russia, has entered into a definitive agreement to acquire Pabst Brewing Co. for an undisclosed amount. TSG Consumer Partners, a leading strategic equity investor in growth-oriented consumer brands based in San Francisco, will acquire a minority stake in Pabst as part of the transaction.

"Pabst Blue Ribbon is the quintessential American brand; it represents individualism, egalitarianism and freedom of expression, all the things that make this country great, said Kashper, who is a graduate of Columbia University and began his career in the beer industry in 1994 with The Stroh Brewery Co. “The opportunity to work with the company's treasure trove of iconic brands, some of which I started my career selling, is a dream come true.”

Most of the beers in Pabst Brewing’s stables—Pabst Blue Ribbon, Rainier, Lone Star, Old Style, Schlitz, National Bohemian and more—were once considered brands of a bygone era. During the 1990s, Pabst began purchasing the brands and marketing them as part of Americana, drawing attention in college towns and beyond, essentially reviving many of the brand names.

Today, Pabst Blue Ribbon is the 17th most-sold beer convenience stores in terms of dollar sales, according to IRI. During the 52 weeks ending May 18, 2014, PBR grew 10.51% in dollar sales in convenience stores and 8.91% in unit sales.

"It will be an honor to work with Pabst's dedicated employees and partner distributors as we continue to build the business," Kashper said. "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."

Kashper will serve as the CEO of PBC and the company's headquarters will remain in Los Angeles, California.

"Pabst has a strong portfolio of authentic American brands,” said Brian Krumrei, managing director at TSG. “We're excited about the partnership with Eugene and the outlook for Pabst going forward."

PBC is currently owned by Evan, Daren and Dean Metropoulos, well-known investors and builders of iconic consumer brands.

C. Dean Metropoulos & Co. and Apollo Global Management LLC bought Twinkies-maker Hostess Brands out of bankruptcy in March 2013 for $410 million.

"We are delighted at Mr. Kashper's and TSG's strong commitment to growing the unique Pabst portfolio,” said Dean Metropoulos, “and we are very supportive of the new ownership group and their exciting plans for the future."

The sale of Pabst Brewing Co. to a foreign entity follows Miller Brewing Co.'s sale to SAB (South African Breweries) in 2002 for $5.6 billion and Anheuser-Busch's sale to Belgium's InBev in 2008 for about $50 billion.

In the Pabst Brewing deal, UBS Investment Bank is serving as financial advisor to Kashper. Perella Weinberg Partners LP and Credit Suisse Securities (USA) LLC are serving as financial advisors to PBC.

Kashper has managed brewing companies in Eastern European and Russian countries and currently serves as chairman of Oasis Beverages, an international beer and beverage company he founded in 2008. Oasis Russia has a 12% share of the Moscow beer market.

TSG Consumer Partners LLC is a leading investment firm with over $2.9 billion in equity capital under management, focused exclusively on the branded consumer sector. Since its founding in 1987, TSG has been an active investor in the food, beverage, beauty, personal care, household, apparel and accessories sectors. Representative past and present partner companies include vitaminwater, Smart Balance, popchips, Muscle Milk, Smashbox Cosmetics, Pureology, e.l.f. cosmetics, Revolve and Planet Fitness.

In business since 1844, the Pabst Brewing Co. is North America's largest privately held brewing company.

Steve Holtz, CSP/Winsight By Steve Holtz, Editor in Chief, CSP Daily News
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