Brynwood buys Cold Spring Brewing

Brynwood Partners has made its sixth investment in the beverage space, buying 143-year-old Cold Spring Brewing Co.

The deal closed Aug. 3. Terms weren’t disclosed. The Lenore family, which acquired Cold Spring in 2000, is the seller.

Founded in 1874, Cold Spring Brewery is one of the oldest beverage manufacturers in the U.S. The company’s biggest business is contract manufacturing: It produces, packages and distributes energy drinks, sparkling waters and alcoholic and non-alcoholic beverages for companies that lack manufacturing assets, as well as private-label customers, in the U.S. and Canada.

Cold Spring produces more than $60 million in net sales.

The company also brews, packages and markets craft beer through its Third Street Brewhouse division. Beers include Sanity Break, Free Speech and Lost Trout.

Cold Spring’s packaging and craft-beer segments are growing by “double digits,” said Dario Margve, a Brynwood managing director. “They can’t handle more customers for all the volume they’re doing in contract packaging,” Margve said.

With Brynwood’s investment, Cold Spring plans to add a fourth high-speed production line. The company will also expand its plant and warehouse facilities in Cold Spring, Minnesota. “We think there is enormous growth potential on the contract packaging side,” Margve said.

Current management, headed by Scott Bender, Cold Spring’s vice president and general manager, is staying, along with the company’s 350 employees, Margve said.

Cold Spring is Brynwood’s latest beverage transaction. In January, Harvest Hill Beverage Co, a Brynwood portfolio company, closed its buy of the Nutrament business from Nestlé HealthCare Nutrition Inc. Brynwood in 2016 bought Sunny Delight Beverages Co and the beverage-manufacturing assets of Faribault Foods Inc in separate transactions.

The Lenore family put Cold Spring up for sale earlier this year. It’s unclear who else bid.  Bryan Jaffe and Erik Einwalter of Cascadia Capital provided financial advice to the seller. Brynwood did not have an IB.

Brynwood, of Greenwich, Connecticut, is a lower-middle-market PE firm that invests in consumer-products companies. The firm can invest up to $80 million equity per deal but has the ability to provide another $70 million using third-party capital.

The investment in Cold Spring is coming from Brynwood Fund VII LP, which collected $420 million in 2013.

Holland & Knight LLP provided legal advice to Brynwood. Stinson Leonard Street LLP was the attorney for Cold Spring.

Executives for Cold Spring could not be reached for comment.

Action Item: Call Scott Bender at +1 320-685-8686

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