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Adelaide craft beer and spirits brands sold to former big brewery boss

Nearly three years after Mighty Craft bought Mismatch and 78 Degrees as part of a $47 million deal, it has sold the businesses for just $7 million to a consortium led by a former Carlton & United Breweries CEO.

Apr 03, 2024, updated Apr 03, 2024
The Mismatch Brewhouse lease is included in Mighty Craft's $7.2 million asset sale. Photo: Mighty Craft.

The Mismatch Brewhouse lease is included in Mighty Craft's $7.2 million asset sale. Photo: Mighty Craft.

Mighty Craft today announced that it has agreed to sell the assets associated with both Mismatch Brewing Company and 78 Degrees to a “third-party buyer led by a consortium of experienced publicans in the Australian hospitality industry” – named in its statement as Mismatch Brewhouse Publicans.

The company, registered in late March, is led by former Carlton and United Breweries (CUB) CEO Peter Filipovic, who also acquired craft beer brand Jetty Road from Mighty Craft late last year.

The $7.2 million cash deal includes the Mismatch and 78 Degrees brands, intellectual property, trading names, contracting arrangements, inventory, equipment and licences.

It comes just under three years after Mighty Craft acquired the two South Australian brands plus Hills Cider in a deal worth $47 million. That agreement also included 75 per cent ownership of the LOT.100 venue at Hay Valley in the Adelaide Hills.

Today’s deal also includes the assignment of the leases for the Mismatch Brewhouse venue in Adelaide’s Whitmore Square, as well as the Mismatch and 78 Degrees production facilities in SA.

Mismatch only recently took over the Whitmore Square pub and microbrewery site, which previously housed Adelaide craft beer brand Sparkke. At the time, Mighty Craft said it expected Mismatch to return the site to pre-COVID trading volumes. In return, Mighty Craft forgave a $1.5 million debt Sparkke owed to it and cancelled its shareholding in the female-founded beverage maker.

Today, Mighty Craft said the sale was “conditional upon the transfer of all liquor licences, and businesses accepting offers of employment made by the buyer”.

“It is intended that approximately half of the proceeds of the sale will be paid to MCL’s senior lenders as partial repayment of its outstanding debt facilities and the other half will fund the ongoing operations of the business,” Mighty Craft said.

“Whilst the timing of completion of the sale is uncertain, the parties are currently targeting a settlement on or prior to 31 May 2024.”

The announcement comes during choppy waters for Mighty Craft which also owns South Australian brand Kangaroo Island Spirits and other Australian craft brands Better Beer, Seven Seasons, Foghorn Brewery, Slipstream Brewing Co and more.

In February, the company flagged it had received “multiple” offers for South Australian-based assets. It said it would evaluate the offers following the recognition of a $40.7 million non-cash impairment, copped due to classifying some businesses as “held for sale”.

In its most recent half-year results – described as “mixed” by managing director Katie McNamara – Mighty Craft said revenue was up by 25 per cent and its loss was reduced from $2.4 million to $1.6 million.

“The company has received a number of non-binding offers for its Adelaide-based assets,” the company’s chair Grant Peck said at the time.

“The company’s future direction will be determined once we are clear on the outcome of these asset sales.”

On releasing its full-year results for the 2023 financial year, Mighty Craft said 78 Degrees and Hills Cider were the only South Australian brands to see a lift in revenue. Sales of Mismatch fell by 1 per cent and Kangaroo Island Spirits sales dropped by 8 per cent.

Shares in Mighty Craft are down 87.5 per cent on a year-on-year basis, and are worth 2 cents at the time of writing.

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