Family Offices Industry News

Family Office of Former Xerox CEO Takes Stake in Colorado Craft Brewery

By Kathleen Leahy

Family Office of Former Xerox CEO Takes Stake in Colorado Craft Brewery Denver, Colorado-based Renegade Brewing announced on November 6, 2017 the sale of an undisclosed stake to Silver Fox Partners, a Northeastern family office founded earlier this year by Anne Mulcahy, the former CEO and Chairwoman of the Xerox Corporation. Specific financial terms of the deal were not disclosed. Renegade founder Brian O’Connell, who launched the brewery in 2011 with funding from about 20 friends and family investors, will continue to serve as CEO. All of the company’s original investors will also retain equity in the brewery. “We are expecting to see some pretty huge growth, and everyone wants to stay in for the ride,” he said.

The decision to seek outside investment from a family office, a process that began early in 2017, stemmed from a desire to “remain competitive” at a time when private equity firms and large breweries have purchased stakes in dozens of craft breweries around the U.S. “For us to stay competitive, we needed a big boost,” he said. “We started as a small company, and we were constantly… bootstrapping.” O’Connell said he plans to use the infusion of capital from Silver Fox to “enhance” the company’s current operations, develop a line of barrel-aged offerings, and hire new sales, marketing and brewing personnel.

“In a bootstrap model, we weren’t able to go out and do all the exploration we wanted. Now we can feed the engine we’ve already created.”

On its way to brewing about 6,000 barrels of beer, Renegade will grow about 35% in 2017, O’Connell said. The company is forecasting about 8,500 barrels of total output in 2018, he added. In addition to its original brewery and taproom location, the company operates a 15,000 sq. ft. facility capable of producing 20,000 barrels annually. It currently distributes beer throughout Colorado via Elite Brands, and to Arizona, Kansas, Ohio and Wisconsin.

Renegade is at least the ninth Colorado-based craft brewery to be involved in a transaction this year. Backcountry Brewery, Deep Draft Brewery, De Steeg Brewing, Fort Collins Brewery, Walnut Brewery, Pug Ryan’s Brewery, Elk Mountain Brewing and 1933 Brewing all changed hands in 2017. Fort Collins-based Funkwerks also sold a minority stake to Brooklyn Brewery.

“Colorado is a great market for craft beer, and it is going to be a place where investors are interested,” O’Connell said. “If you are making it in Colorado, and growing in a competitive market, you are showing that you are a brand with some legs.”

This marks the first investment for Silver Fox Partners. The Auctus Group acted as the advisor to Renegade.

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by Kathleen Leahy

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