15 Dec 2022
Carlsberg to acquire Waterloo Brewing for $144,000,000
On December 15, 2022, Carlsberg Group has reached an agreement to purchase all issued and outstanding shares of Waterloo Brewing. As per the Arrangement Agreement, Waterloo Brewing shareholders will get C$4.00 cash per share, leading to an aggregate equity value of C$144 million for Waterloo Brewing and an enterprise value of C$217 million. This offer indicates a TEV/LTM EBITDA multiple of 12.4x based on Waterloo's Q3 2022 results. The acquisition aligns with Carlsberg's growth strategy in markets like Canada.
The deal offers a 19.4% premium to Waterloo Brewing Shares' closing price on the TSX as of December 14, 2022. The board of Waterloo Brewing, backed by a special committee's recommendation, has approved the transaction. Key directors and executives, holding around 39% of Waterloo Brewing Shares, have also pledged support. The transaction doesn't rely on external financing, as Carlsberg will use its existing cash reserves. Completion is expected in Q1 2023, post which Waterloo Brewing Shares will be delisted from the TSX.
For the transaction, Canaccord Genuity Corp. and Paradigm Capital Inc. confirmed the fairness of the deal for Waterloo Brewing shareholders. Canaccord Genuity Corp. and Wildeboer Dellelce LLP served as Waterloo Brewing's financial advisor and legal counsel, respectively. Paradigm Capital Inc. and Torys LLP advised the Special Committee. Carlsberg was advised by Cormark Securities Inc. and Norton Rose Fulbright Canada LLP.
