The acquisition of Milton-based Dogfish Head Craft Brewing by Boston Beer was completed on July 3, an 8-K filing with the Securities and Exchange Commission reported.
Dogfish co-founder Sam Calagione was appointed as an officer of the Boston Beer with the title of Founder and Brewer, Dogfish Head. George J. Pastrana, Dogfish COO, was appointed as an officer of the company with the title of President, Dogfish Head. Both will report to Boston Beer’s CEO
Calagione and Pastrana have employment agreements with Boston Beer.
The filing also confirmed financial details on the transactions.
The deal calls for shareholders, which included a private equity investor to receive $173 million in cash and 427,096 shares of restricted Class A stock.
A total of 427,096 shares of restricted Class A Stock that will go to co-founders Sam and Mariah Calagione.
Based on current prices, the Calagiones’ stock is worth about $165 million.
The amount of stock going to the Calagiones was adjusted upward from an earlier filing by about 20,000 shares, based on financial factors related to the sale, such as cash, debt and taxes.
Boston Beer funded the cash component of the transaction from its current cash on hand and its available line of credit agreement with Bank of America, N.A.
Boston Beer shares rose on news of the Dogfish Head acquisition. The brewer of Samuel Adams has seen declining sales of its beer brands. The losses have been offset by rising sales for its Angry Orchard ciders and hard seltzer products.
In May, the price of Boston Beer stock rose on news of the Dogfish merger. Dogfish Head has not resorted to deep discounting of its beer and is believed to be solidly profitable. Dogfish Head may also benefit from the distribution system of Boston Beer.
Sam Calagione has long touted the independence of Dogfish Head, but also cited the difficulties of being caught in between brewing giants and a growing number of hyperlocal brewers. Delaware alone has a couple of dozen breweries.
In addition, mega brewers have been acquiring craft operations like Chicago’s Goose Island.
