In an ASX announcement published yesterday, publicly listed company Mighty Craft announced it will be selling off two of its brands, Mismatch Brewing and 78 Degrees Distillery, for a total of $7.2 million.
“[Mighty Craft] is pleased to announce it has entered into an agreement to sell the assets associated with each of Mismatch Brewing Company Pty Ltd (“Mismatch”) and The Hills Distillery Pty Ltd (“78 Degrees”) to a third party buyer,” said the ASX announcement.
Publicly available ASIC documents have named Peter Filipovic, who was CUB’s CEO between 2019 and 2022, as the new director of the ventures. This follows on from his purchase of Jetty Road from Mighty Craft in November last year, which marked his first step back into the brewing industry. Since then, his consortium of publicans has also acquired Hills Cider.
Jetty Road, Hills Cider, Mismatch and 78 Degrees all formed part of the Adelaide Hills Group, which was purchased by Mighty Craft for $47 million three years ago in June 2021. The acquisition reportedly doubled the size of Mighty Craft at the time.
The current sale will include all assets associated with the two brands including intellectual property, trading names, contracting arrangements, inventory, plant and equipment, and licences. According to Mighty Craft’s ASX announcement, the transaction has been motivated in order to get the company’s debt burden under control, which includes $20.9 million owed to Pure Asset Management and $8.8 million owed to the ATO. Recent results suggest that significant changes, such as the selling of assets, are necessary, with its December half yearly report revealing a net loss of more than $51 million.
“It is intended that approximately half of the proceeds of the sale will be paid to MCL’s senior lenders as partial repayment of its outstanding debt facilities,” said the ASX announcement.
“The other half will fund the ongoing operations of the business.”
As a direct consequence of Mighty Craft’s 2023 financial woes, it implemented various staffing changes in an effort to turn the company around. This included the November appointments of Katie McNamara as the new Managing Director and Grant Peck as Non-Executive Chair, who emphasised the need for swift action to reposition the business.
Mighty Craft has indicated that it will continue to back its Better Beer brand, of which it maintains a 33% hold. Better Beer was launched at the end of 2021 by the Inspired Unemployed comedians Matt Ford & Jack Steele. Since then, it has continued to perform strongly, including growing 32% to be worth $26.1 million over the second half of 2023, a continuation of already impressive trends.
Mighty Craft is hoping to have finalised the transaction of Mismatch and 78 Degrees prior to 31 May.
