Mighty Craft; Adelaide Hills
The acquisition will position Mighty Craft as one of the major alcoholic beverage companies in Australia. Credit: AIAC Interactive Agency / Pixabay.

Australian company Mighty Craft has signed a binding agreement to acquire cider, beer and spirits brand owner Adelaide Hills Group for an aggregate consideration of $36.3m (A$47m).

As part of the deal, Mighty Craft will acquire Mismatch Brewing Company, MK Wine Solutions (Hills Cider Co), The Hills Distillery, and a 75% stake in Lot 100 Venue.

Adelaide Hills Group official Toby Kline said: “We are very excited to join forces with Mighty Craft to work towards our mutual ambition to become Australia’s leading craft beverage company.

“Our shared cultural values, vision and entrepreneurial and innovative approach to growing craft beverage businesses make Mighty Craft a highly compatible fit for our brands and our people.”

Mighty Craft said that the funding for the deal includes $20.9m (A$27m) cash and $15.4m (A$20m) worth of shares, which will be issued to the sellers of Adelaide Hills Group at a deemed issue price of $0.35 per share.

The acquisition will position Mighty Craft as one of the major alcoholic beverage companies in Australia with the addition of new brands across key craft segments.

Additionally, the deal is expected to increase the company’s geographical footprint.

Completion of the deal is subject to shareholder approval for the issue of the consideration shares to the sellers, as well as other customary conditions and is expected to complete next month.

Upon completion of the deal, Mighty Craft’s spirit production capacity is expected to increase to 1.5 million bottles in FY22.

Mighty Craft managing director Mark Haysman said: “Both Mighty Craft and the Adelaide Hills team are passionate about creating and growing at scale, local craft beverage brands.

“The combination of the two businesses is expected to see Mighty Craft’s forecast consolidated revenue for FY22 to grow by 57% to $78.7m with forecast underlying EBITDA in FY22 expected to be $6m, including synergies.

“This increased scale and the opportunity to realise significant synergies will truly leverage our operating platform and enhance Mighty Craft’s ability to accelerate the growth of new and existing craft businesses.”

All key management personnel of Adelaide Hills Group will be retained as they continue to drive growth for the company’s entire brands.