Page 31 - Brewdog Teaching Notes
P. 31
of BrewDog - however, if the total fundraise reaches
anything less than £50m, than the overall stake in BrewDog
will be lower than 2.5%.
This staggering £1.85b valuation in 2020 is £.85bn greater
than the valuation of £1bn given in 2017. The question is,
given this time scale
Can this £1.8bn valuation be justified?
It seems like BrewDog, may have overvalued themselves.
Moreover, it is unlikely that investors in this round could
make a return upon sale of their share of the company.
Table 13 in the case study shows BrewDog’s revenues in
2019 totalling £214.8m which, at a £1.85b valuation, values
the company at an 8.6x revenue multiple.
Diagram 10: Source BrewDog Investor Prospectus 2020
This valuation multiple may be reasonable for high tech
industries, but it is unlikely to be so for the mature brewing
industry especially during a pandemic and one of the
deepest global recessions since 1945.
Remember accounting profits are great but cash is king!
