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Mismatch Brewery Co, wholly owned by ASX-listed Mighty Craft (ASX: MCL), will take over the current digs of craft brewer Sparkke at Whitmore Square, Adelaide in early October.
The changing of hands comes after Sparkke was unable to return the two-storey venue to pre-COVID trading volumes - something Mighty Craft expects the better resourced Mismatch to do.
As part of the deal, Mismatch will takeover the leasehold of the Whitmore Square brewpub from 4 October 2022, entering into a new lease for seven years.
In return, Mighty Craft has agreed to forgive Adelaide-based Sparkke’s $1.5 million in debts owed to it, and cancel its shareholding in the female-founded beverage marker that has a keen social equity bent.
Mismatch - a fellow South Australian-based boutique brewer that was acquired by Mighty Craft for $47 million in 2021 - will also take control of Sparkke’s operational on-site brewery.
“This is a great outcome for all parties. Mighty Craft has been working on divesting non-core assets and simplifying our business, which will in turn enable us to focus on our priority brands and further accelerate and grow those priority brands,” Mighty Craft chief executive and managing director Mark Haysman said.
“This transaction is a demonstration of the team executing those plans and is a good result for the Sparkke team, who can now focus on building their spirits business.
“Importantly for Mighty Craft and Mismatch, we now have the opportunity to takeover an award-winning brewpub. We look forward to Adelaide’s favourite craft brand settling into The Whitmore.”
Sparkke co-founder and director Rose Kentish said leaving the Whitmore Square site will enable the craft brewer to focus on the company’s next stage of growth and its spirits business.
“We’re proud that we developed and launched an incredibly successful, award-winning venue that gained local acclaim and national attention. The harsh impacts of 2020 continue to be felt in Adelaide’s current trading environment,” Kentish said.
“In keeping with our commitment to shareholder value, the community in which we operate, and our pub staff, the decision to put our beautiful venue in to the hands of a significantly better resourced operator is the right one.
“We’ve worked well and collaboratively with Mighty Craft and we’re sincerely grateful to them for their contribution to the negotiated outcomes. We warmly welcome our colleagues from Mismatch into their new home and wish them every success. We look forward to focussing all of our energies behind the next phase of our company’s growth.”
Shares in MCL are down 5.11 per cent to $0.13 per share at 1.36pm AEST.
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