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Mighty Craft sells 78 Degrees spirits
Australian drinks firm Mighty Craft has agreed to offload 78 Degrees spirits and Mismatch Brewing for AU$7.2 million (US$4.7m), nearly three years after acquiring the brands in a AU$47m (US$36.3m) deal.
In June 2021, Mighty Craft purchased the Adelaide-based distillery behind 78 Degrees as part of its aim to become one of Australia’s largest craft spirits producers. The 78 Degrees brand comprises Australian whisky, vodka, gin, vermouth and canned G&Ts.
As part of the AU$47m deal, Mighty Craft also acquired sister brands Mismatch Brewing and Hills Cider, alongside a 75% stake in Lot 100, a 84-hectare site comprising a distillery, cellar door, restaurant and function centre in Adelaide Hills.
Mighty Craft has now entered into an agreement to sell The Hills Distillery, maker of 78 Degrees, and Mismatch Brewing Company to a consortium led by publicans in the Australian hospitality sector.
The consortium operates as three businesses: Mismatch Brewing Publicans, Mismatch Brewhouse Publicans, and 78 Degrees Distilling Publicans.
Documents filed with the Australian Securities and Investments Commission indicate that Peter Filipovic, former CEO of Asahi’s Carlton & United Breweries, is the director of all three businesses.
The transaction includes all assets associated with the two brands, including all intellectual property, trading names, contracting arrangements, inventory, plant and equipment, and licences.
The sale also includes the leases for Adelaide-based sites Mismatch Brewhouse, and the Mismatch and 78 Degrees production facility.
The deal is subject to the transfer of all liquor licences and ‘reasonable’ efforts from both parties to maintain key employees.
Half of the proceeds from the sale are expected to be given to Mighty Craft’s senior lenders as partial repayment of outstanding debt, while the remaining amount will fund the ongoing operations of the business.
The sale is expected to be completed by 31 May 2024.
In the second half of 2023, Mighty Craft saw revenue rise by a quarter to AU$28.8m (US$19m), however its CEO warned that “trading conditions at the premium end of the spirits and craft beer continued to be challenging”.
In August 2020, Mighty Craft, formerly known as Founders First, partnered with the ex-chairman of Tasmania’s Lark Distillery to develop a whisky business.
A month earlier, the company unveiled an AU$3m (US$2.1m) expansion plan for Australia’s Kangaroo Island Distillery.