Page 28 - Brewdog Teaching Notes

TSG

In 2017 BrewDog, which posted a £7m pre-tax profit on
£71m of revenues, was valued by TSG Consumer Partners at

£1bn after it took 22.3% stake in the company for £213m

made up of £100m in the BrewDog business and £113m

buying shares from existing investors.

It was confirmed to its investors that their shares were now

worth £13.18 each which was considerably lower than the

2010 share value.

The reason was when BrewDog launched its Equity for

Punks II fundraising in 2011 one existing share divided into

ten before every share then split into five as part of Equity

for Punks IV in 2016. Every share held in the company has

now been divided into ten as part of the TSG investment.

At the time of the TSG investment in 2017 anyone who had

bought one £230 share in BrewDog’s first crowdfunding
round were now seeing a total shareholding worth £6,590,

representing a rise in value of 2,765 per cent in seven years.

Can this £1bn valuation be justified?

Perhaps yes, to another buyer with deeper pockets. But as

this computation will be the basis of future valuations by the
company it needs to be addressed. After all this figure is

very important as it tells the investor how much of the

company they can own for their investment it also gives an