Röko acquires a majority of Sweden’s biggest craft brewer Oppigards
Sweden | Investment firm Röko has acquired 70 percent of Sweden’s leading independent craft brewery, Oppigards Bryggeri, from founder and CEO Björn Falkeström, who will retain 30 percent.
Oppigards is based in the village of Hedemora, some 180 km northwest of Stockholm. The brewery is located on a farm which has been in the Falkeström’s family since the 18th century. It is here that Mr Falkeström has brewed beer since the 1990s.
The present company was founded in 2003. A major brewery expansion was completed in 2016, allowing Mr Falkeström to brew 22,000 hl beer in 2019. Increasing sales steadily, Oppigards is now a SEK 70 million (USD 8 million) turnover firm with 22 employees.
Now is the time to sell
However, Oppigard’s turnover has been flat for the past two years, while profits (EBIT) dropped slightly to SEK 17.6 million (USD 2 million) in 2019, from SEK 18.2 million in 2017, according to public records.
Although financial details were not disclosed, insiders put Oppigard’s price tag at a minimum of USD 20 million.
Oppigards sells 80 percent of its beer through the country’s monopolist alcohol retailer Systembolaget, which may have been a safe thing to do when competition among craft brewers was low. But with over 200 domestic microbreweries vying for shelf space, Oppigards will need to expand into the even more competitive on-premise to return to growth.
Draught beer has become quite popular in Sweden, with pubs and restaurants nowadays featuring dozens of taps, and not just a few as in the past. From what we hear, Carlsberg alone offers more than 60 draught beer brands in Sweden.
Investment fund Röko: no industry consolidator
Founded by Fredrik Karlsson and Tomas Billing, Röko is a Sweden-based investment firm with EUR 270 million (USD 320 million) in committed capital. Its ambition is to be a long-term owner of European small- and medium-sized businesses. Röko has no previous interests in the beer industry and there are no plans to buy more breweries to consolidate an industry. Röko said it wants to buy talented companies and let them develop. Oppigards fits this ticket as it has grown slowly with good profitability.
Mr Falkeström, 54, admitted that he had thought of an exit for some time. “No one gets younger and there is no natural successor in the family.” Not wanting to sell to a Big Brewer, he didn’t have many options left, the website beernews.se said.
A business broker was hired to complete the deal and there were several stakeholders. Mr Falkeström will remain on the board and will also continue to act as CEO. A new CEO will be recruited eventually to succeed Mr Falkeström, but no date has been set yet.
Oppigards’ sale wasn’t met with outcry by the craft beer commentariat, which may be due to the fact that Röko’s plans for the brewery’s future aren’t known.
