The share price in craft beer company Gage Roads Brewing Co Limited (ASX:GRB) will be one to watch once it comes out of its trading halt after announcing it has entered into a binding agreement to purchase 100% of the shares in Matso’s Broome Brewing Pty Ltd.
Gage will acquire Matso’s for $13.25 million plus deferred consideration of up to $2.8 million in cash or scrip, which is subject to meeting sales volume targets over a 3-year period.
To fund the acquisition, Gage will raise $10 million from a placement to institutional shareholders at 8.5 cents per share. An additional $2 million will be raised via a share purchase plan at the same price. The company also announced that its securities will remain in a trading halt until the completion of the institutional placement.
The acquisition of Matso’s will greatly expand Gage’s brand portfolio and is projected to deliver over 20% earnings per share accretion with Matso’s currently generating over $2.5 million in earnings before interest, tax, depreciation and amortisation per annum.
Gage and other listed liquor merchants Australian Vintage Group (ASX: AVG) and Treasury Wines Estate Ltd (ASX: TWE) have all managed to deliver large returns in excess of 25% to shareholders over the last 12 months.