NEW YORK--(BUSINESS WIRE)--Operationally-focused buyout group, Ronin Equity Partners, has created Lotus Beverage Alliance through the simultaneous merger of six companies. The new group has 75 years of combined experience with locations in Lincoln, Nebraska, Ypsilanti, Michigan, Denver, Colorado, Portland, Oregon, and Hopewell Junction, New York. Lotus is a partnership of Alpha Brewing Operations, GW Kent, Twin Monkeys, Stout Tanks and Kettles, Brewmation and Automated Extractions.
Lotus’ more than 1,500 products and services - some patented and many customized - cover canning systems, automation and control systems, turn-key brewhouse construction, packaging, thermal processes, tanks and sanitation equipment. With a recurring spare parts business across all product lines, Lotus is the only company in North America to cover every step of craft brewery and beverage production, from raw ingredient supply to canning and other forms of packaging. In another first, Lotus has introduced a proprietary financing program that offers customers affordable financing options for all the company’s product lines. To provide, clients with maximum flexibility, credit approvals typically take less than 24 hours.
Ronin owns the majority of Lotus, and together, the six companies have a combined value of $100 million. Founders and management hold a significant double-digit ownership percentage, and Ronin has implemented an equity incentive program throughout the organization, extending to even the most junior employees. Research has shown that broad-based employee ownership programs improve worker retention, reduce income disparity, and result in higher margins, as well as improved growth and operating efficiencies across various aspects of a business. Ronin collaborated with Ownership Works in this employee ownership program’s creation.
“As the industry’s only one-stop shop, Lotus has everything that craft beverage creators need to produce the products they love, for the people who love them,” says John Ansbro, Lotus’ newly appointed CEO. “Our ownership structure makes us even more responsive to clients.”
Ansbro, an industry veteran with over 30 years of experience in equipment manufacturing (holding senior executive positions at Alfa Laval, Johnson Controls and the GEA Group) will be joined by Ronin Managing Partner and co-founder Jesse Yao, who will embed as Lotus’ CFO. Ronin Vice-President Jack Burke and Associate Elliott Rogasik are also taking senior executive positions. The board includes six Ronin operating advisors with experience running global operations at some of the world’s largest (or most celebrated) beer, food and beverage manufacturers, including SABMiller, AB InBev, Harpoon Brewery, KraftHeinz, Naked Juice and Ocean Spray).
“We are thrilled at the prospect of uniting a fragmented craft beverage supply landscape through a remarkable alliance of industry partners.” says Yao. “By embedding Ronin executives in the back office, our corporate partners can concentrate more fully on expanding their product range and increasing sales.” Managers and founders from the six merged companies form the bulk of senior management at Lotus.
On a combined basis, sales for the merged group rose 29 percent over three years to $65 million in 2022 while earnings before interest, tax, depreciation and amortization increased 39 percent. Rapidly growing international sales in Europe and Asia where high-quality, smaller-batch craft beer production is just taking off, accounts for some 7 percent of combined group sales, increasing from virtually nothing in 2019.
Beyond the purchase price, Ronin has reserved nearly $35 million in pre-arranged financing to fund acquisitions for Lotus in the Americas, Europe and Asia. Ronin and Lotus have identified more than 50 potential acquisitions and are in active discussions with nine of those companies.
In addition to craft beer, Lotus’ products and services are equally suited to other fast growing beverage markets including kombucha, cold brew coffee, hard seltzer, ready-to-drink cocktails, premium wines and ciders, and cannabis-infused drinks. These products currently account for some 26 percent of sales.
The six acquisitions forming Lotus were financed using Ronin’s balance sheet, with investments from a range of limited partners, including Nicola Wealth and Fiera Comox.
Since the first quarter of 2021, when it began investing, Ronin has deployed over $350 million including reserves for follow-on portfolio investment. The capital was committed to five platform investments, comprising a total of 21 companies. Since deal close - i.e. within two years - annualized earnings before interest, taxes, depreciation and amortization at Ronin’s first four platform companies have risen 30 percent to $104 million, while annualized revenues are up 23 percent to $484 million.
Triago Americas Inc., acted as sole placement agent on all of Ronin’s platform investments, including the Lotus transaction. Katten Muchin Rosenman acted as Ronin’s legal advisor on Lotus; buyside M&A advisors were KeyBanc and Harvey & Company. Debt was provided by Webster Bank as Lead Left Bookrunner & Administrative Agent and by Texas Capital Bank, BHI and Stifel Bank as Joint Lead Arrangers.
About Ronin Equity Partners
Based in New York City, Ronin Equity Partners represents a new type of investment firm, powered by an operationally-focused value creation strategy. Ronin makes control equity investments exclusively in the Industrial and Consumer sectors, where the team has prior expertise. The group buys strong businesses with high demonstrated cash flows, where Ronin’s operating playbook adds value. The Ronin team embeds into each company as interim senior executives to build a robust back-office infrastructure capable of scaling the business for growth and seamlessly integrating acquisitions. This partnership empowers management to focus entirely on growing the business without being burdened by back-office operations. The firm was founded in 2019 by Managing Partners David Feierstein and Jesse Yao alongside other former senior executives from Kraft Heinz, NCR, and Diversey. The firm is supported by some 75 operating advisors in the consumer and industrials sectors. www.roninequitypartners.com
