Canadian cannabis company Aphria Inc. is set to acquire Atlanta, Georgia’s SweetWater Brewing Co. for about $300 million. SweetWater is known for terpene-infused, alcoholic seltzers and its 420 brand.
For the year ended December 31, 2019, SweetWater generated net revenue of $66.6 million and adjusted EBITDA $22.1 million. According to the Brewers Association, the company’s production volume increased at twice the growth rate of the U.S. craft beer market at 7 percent year-over-year to nearly 261,000 barrels.
Irwin D. Simon, Aphria’s chairman and CEO, said the deal allows the company to establish and grow its U.S. presence through SweetWater’s “robust, profitable platform of craft brewing innovation, manufacturing, marketing, and distribution expertise.”
“At the same time, we will build brand awareness for our adult-use cannabis brands, Broken Coast, Good Supply, Riff and Solei, through our participation in the growing $29 billion craft brew market in the U.S. ahead of potential future state or federal cannabis legalization.” – Simon in a statement
Freddy Bensch, SweetWater’s CEO and founder, said the company’s 420 brand and annual SweetWater 420 Fest, “complement Aphria’s cannabis business and create mutual opportunities for accelerated expansion into other cannabis- and beverage-related products in the U.S. and Canada.”
“We will leverage our growing beverage offering and build an even stronger, more diversified company with a continued focus on authentic and distinctive brands using some of the freshest, most flavorful ingredients to create innovative and high-quality beverages including beers, seltzers, spirits and non-alcoholic beverages that our loyal and growing consumer base has come to expect from SweetWater,” he said in a press release.
Aphria expects the acquisition to be immediately accretive to EBITDA and diluted earnings per share, it said.
SweetWater beverages are currently available in approximately 29,000 retail locations and in more than 10,000 restaurants and bars. SweetWater 420 Extra Pale Ale and IPA are served on all Delta flights totaling more than 50 countries across six continents.