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October 18, 2013

Ommegang parent buys Mo. brewery

By Joe Mahoney Staff Writer
The Daily Star

---- — COOPERSTOWN — The parent company of Brewery Ommegang has struck a deal to purchase Boulevard Brewing Co., a move that local executives say will boost production at both the Cooperstown brewery and Boulevard’s brewery in Kansas City, Mo.

The financial terms of the private deal were not disclosed in an announcement made Thursday afternoon.

The acquisition will make Duvel Moortgat the eighth-largest independent craft brewer in the United States, said Simon Thorpe, the president and chief executive officer of Brewery Ommegang.

Boulevard, with 125 employees, had been ranked as the twelfth-largest craft brewer in the nation.

Both Brewery Ommegang and Boulevard Brewing will remain independent, Thorpe said.

Boulevard Brewing was founded 25 years ago by a Kansas City entrepreneur and master cabinetmaker, John McDonald, who will now become an investment partner in Duvel Moortgat’s U.S. business, Thorpe said.

Thorpe emphasized that the acquisition was made in order to allow both breweries to expand, not to trim overhead.

“What this transaction is not about is squeezing everything together and slashing costs and making people redundant,” Thorpe said. “On the contrary, we are looking to grow all three businesses (Ommegang, Boulevard and imports from Duvel’s European breweries).”

Boulevard now produces about 220,000 hectoliters of beer each year, far exceeding the total of 74,000 hectoliters sold by Ommegang and Duvel in the US, Thorpe noted. One barrel of beer equals 1.17 hectoliters.

Brewery Ommegang — now with 101 employees, up from 40 in 2009 — has annual revenues of $38 million, Thorpe said. He said Brewery Ommegang includes to add several new jobs in the coming year, including four workers who would be involved in beer production.

Thorpe called the acquisition good news for workers at Brewery Ommegang.

“We’re expecting a volume of growth to come out of this for Ommegang,” he said. “We are at about 50 percent of capacity now. We have invested about $14 million here in the last three years, and we have more than doubled our business in the last three years, and we want to do the same in the next three years. This announcement today will only help us accelerate that.”

One significant way the deal will help both Boulevard and Ommegang is that the sales teams of both companies will be combined. The goal is to make Boulevard’s beers, now largely consumed in the Midwest, popular with beer drinkers on the East and West coasts, and to allow Ommegang to find new customers in the interior states, Thorpe said. The combined sales team will have more than 50 people.

“This is almost a perfect match made in heaven,” Thorpe said of the deal.

In a joint press release from Duvel Moortgat and Boulevard Brewing, McDonald stated: “I wanted to find a way to take the business to the next level while retaining its essence, its people, its personality — all the characteristics that make our beer and our brewery so important to Kansas City and the Midwest.”

McDonald, according to the announcement, will remain involved with Boulevard in Kansas City, and will be “intimately involved in Duvel Moortgat’s activities in the U.S., with a stake in the combined company and a seat on its board.”

McDonald, in an interview with the Kansas City Star, drew a distinction between his company’s acquisition by Duvel and the purchase of Anheuser Busch by InBev, a transaction that was controversial in the U.S. because it involved the takeover of the nation’s largest brewer by a foreign firm. Like Duvel, InBev is also a Belgian company.

“This is not what happened in St. Louis, it’s totally different,” the Kansas City paper quoted McDonald as saying. We will add jobs and investment and not cut two-thirds of our work force. They (Duvel) are very collaborative.”

Boulevard Brewery’s best-selling beers are its Boulevard Pale Ale and Unfiltered Wheat. It is also known for its Smokestack Series in both 750 ml bottles and four packs.

Duvel Moortgat is controlled by Michel Moortgat, the chief executive officer, his two brothers and a cousin. In addition to Brewery Ommegang, the family has six breweries in Europe.

In the joint press release, Michel Moortgat suggest that Boulevard is a good fit for the Duvel portfolio.

“Our path for growth became abundantly clear as I got to know John and Boulevard,” Moortgat said.

For at least the next several months, Thorpe said he expects to be dividing his time between the Boulevard brewery in Kansas City and Brewery Ommegang, located just south of Cooperstown on county Highway 33 in the town of Middlefield.