Sequoia Capital-backed beer brand Bira 91 targets fund raise again; looking to mop up $100 million by tapping PE funds

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In yet another sign of deal activity in the domestic alco-beverage segment, leading craft beer brand Bira 91 is on the prowl to raise funds again and is looking to mop up around $100 mn in growth capital, multiple industry sources with knowledge of the matter told Moneycontrol.

The move comes five months after the firm had raised $30 mn from Japanese integrated beverages Kirin Holdings in January 2021. That transaction valued the alco-beverage firm between $230 mn to $240 mn.

Delhi based B9 Beverages is the parent firm of Bira 91 which is  backed by private equity firm Sequoia Capital.

“ They are looking to raise around $100 mn for growth capital, expansion plans and marketing spends by selling a minority stake.  Investment bank Lincoln International has been mandated for the proposed transaction,” said one of the individuals cited above.

“The deal has been launched, preliminary meetings have begun and Bira 91 is looking to tap private equity funds for the same,” a second individual told Moneycontrol.

A third individual also confirmed the capital raise plans. Gateway Brewing Company, Independence Brewing Company and White Owl are some of the  domestic rivals of Bira 91.

All the three individuals spoke to Moneycontrol on the condition of anonymity.

Moneycontrol is awaiting an email response from Bira 91 and Lincoln International and has sent reminders. This article will be updated as soon as we hear from the firms.

According to reports, Kirin would hold less than 10 per cent after the transaction in January. Sequoia is believed to be holding about 45 per cent stake in Bira 91 while founder Ankur Jain owns around 30 per cent, these reports added.

Back in April 2020, the firm announced that it had raised $30 million in funding led by Sequoia India and Belgium-based investment firm Sofina. The equity financing round also saw participation from Mumbai-based consumer-focused venture capital fund, Sixth Sense Ventures, Korean private equity fund Neoplux, and certain family offices.

‘SPIRIT’ED M&A ACTIVITY IN THE ALCO-BEV SEGMENT

On June 13th, 2021, Moneycontrol reported that domestic player John Distilleries, the maker of top selling popular segment whiskey ‘Original Choice’ and premium brand ‘Paul John Single Malt’ whiskey and private equity firms KKR & TPG were in the race to acquire select popular or mass brands of Diageo promoted United Spirits Ltd ( USL)

USL is looking to adopt the premiumization strategy and focus more on the high margin scotch whiskey segment to take on French liquor major Pernord Ricard in the Indian market.

Additionally, in another transaction, on 23rd June, 2021 , Heineken International BV acquired an additional 14.99 per cent stake in United Breweries Limited ( UBL) for around Rs 5,824 crores.  Prior to the transaction, Heineken held a 46 per cent stake in UBL. A further realisation of Rs 800 crores by sale of shares is expected on 25th June.

KKR is no stranger to the spirits space and has been linked with USL stake buy plans back in 2009. In 2016, the private equity firm provided debt funding to Punjab based Jagatjit Industries, makers of Aristocrat whiskey as part of the latter’s revival plan. Globally, in 2010, the US private equity giant has invested in VATS liquor Store, a leading nationwide liquor store chain operator in China. Its current portfolio includes Australia Venue Co, a leading operator in the pub, bar and restaurant industry.

According to reports in 2013, TPG and Carlyle were in talks to buy out a minority stake in Allied Blenders & Distillers, the makers of ‘Officer’s Choice’ whiskey. The US private equity major had also evinced interest once in Shaw Wallace & Company and had sold Turkish distiller Mey Icki to Diageo for $2.1 billion. According to its website, its current portfolio includes Beringer Wine Estate Holdings, which was founded in 1876 and is a producer of premium California varietal table wines. Mey Alcoholic Beverages , a market leader in Turkey in the vodka, gin and liquer categories , is also part of the TPG portfolio.