Pyramid Breweries to be acquired by Magic Hat
Pyramid Breweries Inc. has agreed to be acquired by Magic Hat Brewing Company & Performance Arts Center Inc. for $2.75 a share in cash.
Pyramid, which brews beer and operates five alehouses, said Tuesday its board had approved the deal, as have shareholders accounting for about 29 percent of the company's stock.
The deal is valued at about $25.2 million, based on 9.2 million shares outstanding as of March 10, and is expected to close by the end of August pending a review of Pyramid's business and legal affairs by Magic Hat and regulatory approval.
"There will be a number of important benefits for Pyramid to be part of a private company versus continuing to operate as a stand-alone public entity," said Pyramid Chief Executive Officer Scott Barnum in a statement. "This consolidation makes both good strategic and financial sense and is well timed, particularly as the beer industry's competitive dynamics continue to intensify."
Pyramid's shares have declined steadily since its 1995 initial public offering, from more than $12 per share, adjusted for splits and dividends, to less than $2 per share on an adjusted basis Monday, the day before the acquisition was announced.
Burlington, Vt.-based Magic Hat sells its "No. 9" and other brews from Maine to Georgia and as far west as Illinois. Pyramid, which produces beers primarily under the Pyramid and MacTarnahan's brands and sells mostly in the West, said the companies complement each other geographically.
Pyramid has about 500 employees, with its main breweries in Portland, Ore., and Berkeley, Calif. The company said it will maintain offices in Seattle.
Martin Kelly, CEO of Magic Hat said, “We have a great deal of respect for Pyramid’s brand heritage, award-winning beers and its dedicated employees, and look forward to consummating this transaction, which provides both strategic and financial benefits both to Pyramid’s and Magic Hat’s stakeholders.”
Kelly previously served as CEO at Pyramid before joining Magic Hat.
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