L Catterton to take £15m stake in Scottish craft brewer Innis & Gunn


Founder Dougal Gunn Sharp (Source: Innis & Gunn)

Scottish craft brewer Innis & Gunn has got the backing of one of the world's largest consumer investment groups L Catterton in a deal which gives the company an estimated value of about £58m.

L Catterton, the merger between luxury goods giant LVMH and private equity firm Catterton Partners, is set to take a 27.9 per cent stake in the business for £15m.

The additional fundraising follows an equity crowdfunding campaign last year which smashed its £1m target as investors put £2.5m into Innis & Gunn in exchange for 4.79 per cent of the business.

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The brewery, founded in 2003, increased annual turnover by 22 per cent to £14.3m last year. Founder and master brewer Dougal Gunn Sharp now hopes to reach new drinkers with the help of L Catterton's cash injection.

"When we started crowdfunding we set out very clearly the things that we planned to do, which are to concentrate on growing lager in Scotland and growing our barrel-aged range internationally as well as continuing to invest in our brewery," he told City A.M. today. "The arrival of L Catterton will allow us to do it faster."

He added that bringing L Catterton representatives onto the company's board would allow it to benefit from the firm's experience and connections.

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The brewery is already the top imported beer in Canada, and expanded into some Asian markets earlier this year. It exports to 28 markets and its products have expanded from the traditional range of barrel-aged beer to include everything from a limited edition raspberry flavoured brew to a zero alcohol beer. 

The move follows in the footstep of fellow Scottish craft brewer Brewdog, which sold a stake to TSG Capital Partners in April, giving it a value of £1bn.

Sharp is keen to see craft beer outfits expanding in whatever way possible, saying it was a good thing if companies like his could change the landscape.

"Craft beer is booming," he said. "As we all know, drinkers are ditching mass-produced flavourless beer and naturally every craft beer as it grows will need to maintain the capital. There are lots of options open, every business just needs to do what's right for it at the time."

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The decision to take a private investment has today been put to a vote by the investors who took part in last year's crowdfunding. Sharp says their thoughts will be taken into account, despite the 2,000 shareholders owning just under five per cent of the business between them.

However, he added that any investor unhappy with the deal would be able to sell shares back to the company at the price they paid.

"All the shareholders I've spoken to so far are incredibly supportive," he said. "They recognise the huge opportunity L Catterton brings."

Headquartered in Edinburgh with a brewery in Perthshire, Innis & Gunn is one of the earliest and biggest craft brewers in a fast-growing Scottish craft boom, which has helped the Scottish brewery sector to double since 2010.