The Boston Beer Company — makers of Sam Adams and the second largest craft brewer in the U.S. — and Dogfish Head Craft Brewery announced they have signed a definitive merger agreement to combine the two companies in a deal valued at approximately $300 million.
Under the terms announced, Delaware-based Dogfish Head founder Sam Calagione and his family would get around 406,000 shares of Boston Beer Company, valued at $314.60 a share, while Dogfish Head shareholders would get $173 million in cash.
“We expect that we’ll see more consolidation in the craft industry over time, and we’ll be in the best position to take advantage of those changes,” said Boston Beer Company CEO Dave Burwick in a statement.
Dogfish Head was the thirteenth-largest craft brewer in the United States as of 2018, according to the industry group Brewers Association.
The companies said Dogfish Head’s net sales for the full year 2019 are expected to be between $110 and $120 million. Boston Beer said it plans to consolidate Dogfish’s results into its financial report in the late second quarter and the transaction will be neutral to slightly accretive in 2019 and will not have a material impact on full-year 2019 earnings per diluted share.
Boston Beer expects that its current cash on hand and available line of credit will fund the cash component of the transaction. The transaction is expected to close late in the second quarter of 2019.
Burwick will head the merged company. Dogfish co-founder Sam Calagione will join Boston Beer’s Board of Directors beginning in 2020.
Dogfish Head was advised by McDermott Will & Emery and Arlington Capital Advisors. Boston Beer Company was advised by Nixon Peabody.
Boston Beer Company shares were up more than 2% in midday trading.