Management team buys Genesee
Deal keeps nation's fifth largest brewery in business
Aug 30, 2000 - A management-led team has completed arrangements to buy the Genesee Corp. brewing unit, maker of Genesee beers.
The Rochester, N.Y., company said it agreed to sell its brewing arm to a group led by Chief Executive Samuel Hubbard Jr. for more than $22 million as part of its plan to sell all of its assets. The No. 5 U.S. brewer said it also would sell its Ontario Foods division to Ralcorp Holdings Inc.
Genesee, which began making beer in 1878, expanded its operations a few years ago to include food processing, equipment leasing and real estate as the company tried to offset slumping sales at its traditional brewing business.
The Hubbard-led group will pay Genesee $17.5 million in cash plus net working capital at closing for the brewing unit. Another $4.5 million would be paid by Genesee taking back a three-year note from the purchaser, bearing 12% annual interest. The sale of the brewing unit will result in a net gain of $5 million.
In addition to making its Genesee, J.W. Dundee and Michael Shea's brands, Genesee is under contract to brew Samuel Adams beer for Boston Beer Co. Pabst had offered to buy certain Genesee labels but the brewery would have closed if that deal had been consummated.
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